Decision Support Unit (DSU)

28th June 2018

e-Pact is a consortium led by Oxford Policy Management and co-managed with Itad

Decision Support Unit

(DSU)

Mid-term evaluation (MTE) of Essor

Final Report

Mid-Term Evaluation of Essor

This evaluation is being carried out by OPM under e-Pact. The project manager is Andrzej Dabkowski. The Project Director is Jonathan Mitchell and the remaining team members are listed above. For further information contact [email protected]. The contact point for the client is Lubna Ghneim ([email protected]).

e-Pact Level 3, Clarendon House Tel +44 (0) 1865 207300

207300

52 Cornmarket Street Fax +44 (0) 1865 207301

207301

Oxford OX1 3HJ Email [email protected]

United Kingdom Website www.opml.co.uk

e-Pact i

Acknowledgements

The lead author of this report is Charles Krakoff (Essor Component MTE Leader) under the direction

of Stephen Jones (Private Sector Development (PSD) MTE Director) supported by Laura Watson

(Senior Private Sector Development Specialist). The Oxford Policy Management (OPM) Project

Manager is Andrzej Dabkowski. The other members of the team were Hamish Colquhoun (DSU

Team Leader, and Value for Money (VFM) Assessment), Pierre Grega (Leader, Political Economy

Context Analysis), Jonathan Mitchell (Decision Support Unit Project Director), Tim Mitchell (literature

review), Ozlem Akkurt (DSU review), Terry Roopnaraine (DSU Gender Specialist), Arlette Nyembo

(DSU Democratic Republic of Congo (DRC) Coordinator), and Johan Verhaghe (Fieldwork

Coordinator).

The MTE team would like to thank all organisations and individuals who provided information and

assistance, especially during the team's mission to DRC. This includes key informants and

participants in Focus Group Discussions (FGDs) that were held in October 2017 in Kinshasa and

the former provinces of Equateur, North and South Kivu and Katanga.

We thank the staff of the Department for International Development (DFID) for their support and

assistance and, particularly, the staff of Essor, for helping with programming meetings and sharing

information.

Disclaimer

This report has been prepared by the ePact consortium for the named client, for services specified

in the Terms of Reference and contract of engagement. The information contained in this report shall

not be disclosed to any other party, or used or disclosed in whole or in part without agreement from

the ePact consortium. For reports that are formally put into the public domain, any use of the

information in this report should include a citation that acknowledges the ePact consortium as the

author of the report.

This confidentiality clause applies to all pages and information included in this report.

This material has been funded by UK aid from the UK government; however, the views expressed

do not necessarily reflect the UK government's official policies.


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Executive summary

This document presents the main findings and conclusions of the Mid-Term Evaluation of the UK

Government Department for International Development (DFID)'s Essor project. Essor is one of three

components of the PSD programme in DRC and is a £35 million, five-year business environment

reform project implemented by PricewaterhouseCoopers (PwC). The project aims to realise a

cumulative net income increase of £10.6 million by the time of project closure in January 2020. This

will be achieved by increasing the incomes of 40,000 micro, small and medium-sized enterprises

(MSMEs) due to savings on taxes and costs of compliance for business owners.

The main purpose of this evaluation is to identify any constraints or risks to the achievement of the

objectives of the Essor project and to recommend corrective actions where these are required. The

evaluation is structured around six evaluation questions (EQs). These questions were answered with

evidence from a literature review; a political economy context assessment; three case studies, three

sector performance reviews; a results verification exercise; and a VFM assessment.

Findings

Design

Essor is not well designed to improve the business environment because the project:

• Lacks a systematic programmatic approach to private sector engagement and the identification and prioritisation of business environment reform opportunities;

• Lacks a robust and flexible system to adjust resourcing and planning based on traction of the interventions; and

• Failed to articulate an adequate Theory of Change including key assumptions and then use this to guide implementation. As a result, Essor’s interventions have been implicitly based on assumptions about political commitment, capacity, the challenges of engaging with the private sector and fragility that have not been critically examined and that are highly problematic in the DRC context.

Management and Organisation

Essor's poor performance is largely attributable to weak organisation and management.

• Effectively managing a £35 million BER project in DRC is one of the more challenging tasks

in development.

• Essor does not have an effective senior management team (SMT) driving project delivery in

Kinshasa. Team leadership has been part-time until February 2018 with little senior support

and limited authority over the workstreams.

• Both DFID and PwC London have made interventions which, while well intentioned and often

seeking to address important weaknesses, have had the effect of further undermining in-

country project team leadership.

• The lack of an effective SMT has resulted in weak strategic leadership and a lack of

workstream accountability.


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• Placing a full-time, francophone Team Leader (TL) in the project is a necessary but

insufficient condition to improve Essor. It also requires a powerful SMT to support the TL and

for this team to have the autonomy to manage the project.

• Essor has not defined or applied standardised processes for the management of partner and

stakeholder relationships. A proper set of such processes would start with the criteria for

selection of public sector partners, which emphasise their willingness and capacity to effect

change; the institutional context; the potential for Essor to achieve desired impacts by

working with a given partner; and the operational, financial and reputational risks of a failed

relationship. The absence of any such processes has resulted, variously, in poor choice of

partners, poor follow-through of Essor teams with partners, and inability of Essor teams to

gain traction with chosen partners.

• Generally, there is no structured coordination between ÉLAN and Essor to enhance

performance. There is evidence of some cooperation and exchange of information between

Essor and ÉLAN for the insurance and leasing interventions. There have been some

instances of effective cooperation between the two projects on the coffee export tax.

However, otherwise ÉLAN has launched market systems interventions without consultations

with Essor to address relevant BER constraints.

Achieving Results and Impact

• Essor is likely to deliver some improvements in DRC's business environment. These include

a reduction in the time and cost of business registration and increased access to finance

through the creation of a collateral registry (OHADA); creation of a framework for public–

private partnerships in renewable energy systems (A2E); reduction in the coffee export tax

(AVC); and, potentially, reduction in corrupt practices at a key border crossing (AC), and

reduction of the multiplicity of local government taxes and fees (MSME).

• It is too early to tell if the interventions are generating the targeted impacts, but progress

against outputs and outcomes is slow. This evaluation has found that only two workstreams

have made significant progress (OHADA and A2E).

• The OHADA workstream has already contributed to an improvement in the DRC’s Doing

Business ranking for establishing a business but the potential impact that might be achieved

from this is not yet clear.

• No other workstream has progressed far enough to produce measurable impacts, and the

evidence tells us that we should not expect a BER project to have achieved much at this

stage of the project. The evidence for testing whether interventions are on track to achieve

an impact is more generally unclear or unconvincing. This is not unusual for a BER

programme at the beginning of its fourth year of operation, since reforms, even if successfully

implemented, can take a long time to generate measurable improvements in economic

performance, increased household incomes, or similar impact indicators.

• There is no evidence that poor producers and women are accessing new opportunities

unlocked by Essor interventions.

• The MTE has not identified any unintended consequences.


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Monitoring and Results Measurement

• The verification exercise undertaken on the recently adopted MRM system rated over two-

thirds of its indicators 'red' (i.e. low confidence that reported results accurately reflect reality)

and the remainder 'amber' (i.e. medium confidence), which indicates that the quality of the

results needs to be strengthened before the MRM can be used as an effective monitoring

tool.

• The logframe does facilitate adaptive management to some extent, as the impact and

outcome indicators are mostly common to different interventions, with progress of the

workstreams measured by the achievement of milestone results and delivery of interim

impacts and outcomes.

• Where the logframe struggles is comparing achievement across the different workstreams to

enable readjustment of resources based on traction of the different workstreams. The

logframe does not track how workstream interventions contribute to project results and there

is no system that we were aware of to compare achievement across the workstreams and

monitor intervention progress.

Value for money (VFM)

• Overall the project is unlikely to deliver value for money on its current trajectory. Only two

workstreams (OHADA and A2E) have made reasonable progress, while all others have either

already closed down or do not yet have compelling evidence to suggest they are on track to

deliver any impact. There are major weaknesses with the management of the project, despite

this representing around one-third of the project's costs. For the OHADA and A2E

workstreams, the nature of potential benefits needs to be more rigorously set out to allow a

more evidence-based judgement of the extent to which these specific interventions might be

achieving VFM.

Recommendations

For each recommendation we provide an indication of whether the recommendation is primarily

addressed to DFID DRC (DFID) or the Essor management team (Essor).

Overall management of the project

1. It is recommended that the project be given a period of four months (to end of April 2018) to

substantially improve the central management and agree the composition of its workstreams on

an informed basis. If project management has not adequately improved by this point then the

project should be pared down to its performing workstreams (OHADA, A2E). Key criteria to

evaluate management improvements should include:

1. A competent, full-time, resident, Francophone, BER specialist Team Leader in post, with a

functional SMT;

2. Strategic coherence, complementarity, and relevance of the workstreams and their

interventions articulated; and

3. Each workstream having produced an assessment of:


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o A plausible workstream theory of change, including assumptions;

o What is likely to have been delivered in terms of results by project closure;

o What resources are needed to achieve this goal; and

o Progress against clearly defined performance targets (Essor, DFID).

2. The workstreams need to have either resident French-speaking leads, or (if non-resident) senior

members of the team who can interface with the client and support them in decisions related to

the political economy. They need not be highly experienced technical experts: with the exception

of A2E, few Essor interventions require highly developed technical expertise. Their principal

tasks should be to build relationships with and coordinate support to designated counterparts

and beneficiaries, often through relationships and in conjunction with other donors. The

workstream leads, subject to approval by the Team Leader, should have the ability to bring in

short-term technical specialists as needed, with a minimum of delay (Essor).

3. Wherever possible, DFID needs to reduce its involvement with ongoing project management

decisions to enable the project to be more rapid, flexible and responsive to ongoing

implementation needs. DFID can advise and can also put in writing their suggestions but the

accountability for implementation decision making should be with the implementing partner

(DFID).

4. The monitoring and results measurement (MRM) system should be strengthened to more

accurately reflect achievements and results appropriate to a BER project. This could include

developing more intervention-specific impact indicators based on an exercise of clarifying the full

range of expected benefits for each workstream. It should also incorporate a review of what the

best indicators of progress towards such impact could be. The timing of the project's final

evaluation should be three to five years after project close-out, providing a more realistic time

frame to assess the true impacts of the project (Essor).

5. The project needs to implement its private sector engagement strategy, and engage in a

systematic way with the private sector to better identify issues and develop solutions. Different

techniques can be used:

• Use of the planned regular MSME survey to gather feedback on issues and progress on

reform;

• A light-touch stakeholder mapping for each intervention to identify key potential

champions and challengers for each reform. This can be used as the basis for

establishing public–private dialogues to work on each issue;

• If there is time at this stage of the programme, working alongside business management

organisations (BMOs) (and engaging other local stakeholders such as think tanks and

the media) to build their capacity to represent MSMEs and specifically to prepare issues

for dialogue, and advocate and monitor reform; and

• Implementation of the communications strategy to build support for the reform process

(Essor).

6. An improved VFM framework should be implemented. Key changes include defining the

qualitative analysis required, setting targets and breaking down the analysis to the workstream


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level, and improving and integrating the impact modelling into the framework. Reporting against

the framework should focus on what the analysis implies for adapting the project implementation

strategy (Essor).

7. Essor should seek to place a long-term, resident expert within ANAPI to support the organisation

and help set strategic reform priorities, most likely by working with one or more local staff to set

and carry out a policy reform research agenda (Essor).

8. Essor should cooperate more closely with the ÉLAN project. DFID should develop an approach

to sharing attribution that incentivises collaboration between the projects (DFID).

Overall project portfolio strategy

9. Given most workstreams' slow progress to date, and the complexity of BER in the DRC, the

project's remaining time frame is very short.1 To inform the project's strategic choices, DFID

should clarify whether it is willing to continue to engage in BER beyond 2019 (DFID). If DFID

does not indicate a willingness to continue supporting BER in DRC, Essor should plan its project

closure based on the expectation of no further engagement beyond the end of 2019. The

expected end-point of all workstreams ahead of that date needs to be clear, including any

required transition arrangements of activities to government or other donors. In such a context

there seems limited merit for any further diagnostic or early-stage reform activities (Essor).

10. Given the challenges the project has faced in trying to manage its activities in the highly complex

area of BER in the DRC, a practical approach at this stage would be to reduce the range of

activities being supported. This is relevant both within certain workstreams themselves (anti-

corruption, which has engaged in far more interventions and activities than it has the

management and technical capacity to support) as well as in reducing the breadth of the Essor

portfolio of interventions. An optimal portfolio at this stage of the project would consist of a

continuation of the OHADA and A2E workstreams as currently configured, together with an anti-

corruption workstream reduced to a much smaller set of interventions, but with the possible

incorporation of the MSME as a standalone intervention within the anti-corruption workstream

(Essor).

11. Were DFID to indicate a willingness to continue to support BER in the DRC beyond 2019 then

the project could adopt an approach closer to the originally intended flexible facility design. The

sector performance reviews and case studies set out specific examples of potential new

departures for workstreams that might prove effective but would require a longer period of

support than could be achieved during what is left of the project's existing time frame (Essor).

12. The decision has already been taken to shut down the agriculture value chain (AVC) workstream.

It is recommended that the Essor AVC team be offered to ÉLAN to work on improving the

business environment for the coffee value chain and others, notably by reforming the rules,

regulations and procedures that Office National du Café (ONC) applies, and providing technical

assistance and capacity building to continue to help the ONC become an organisation that

provides valuable services to actors in coffee and other agriculture subsectors (ÉLAN).

1 Essor's contract end date is January 2020. To allow for sufficient reporting as well as the wind-down of relevant activities, this implies most workstreams will need to largely complete their activities by the end of Q3 2019.


e-Pact vii

13. The project should develop a systematic engagement strategy with the private sector, to build

the capacity to identify and advocate for reforms and to encourage transparency and

accountability (Essor).

14. To improve its gender focus, Essor should collect specific gender-focused data for all its data

collection and survey activities for 2018. This is not simply a question of disaggregating samples

and responses by sex: specific questions need to be asked about the gender outcomes and

impacts for the workstreams under study. There is currently no mention of gender in the survey

descriptions. Careful attention then needs to be paid to considering how this data practically

informs the implementation of workstreams (Essor).

15. The logframe could be adjusted to include nested logframes which would better track

implementation and results of workstream interventions (Essor).

16. In general, interventions going forward should move away from the current heavy focus on

training and sensitisation, and towards more practical and facilitative actions with concrete and

measurable outputs (Essor).

17. Essor should use political economy analysis more systematically to guide the management of

partner and stakeholder relationships.

Detailed recommendations by workstream

18. Access to electricity: The A2E workstream should continue its activities with few changes.

19. OHADA: should be continued and expanded as resources permit (more detailed

recommendations are provided in the OHADA Case Study).

20. AC: future AC interventions should restrict themselves to Kinshasa and one other location –

working with women traders to reduce corrupt practices at the Kasumbelesa border crossing

appears to be a promising opportunity.

21. AVC: DFID have decided to close the AVC workstream in Essor. It is proposed that the AVC

team be offered to ÉLAN to assist with the enabling environment for agriculture and agri-

business.

22. MSME: Given the degree of convergence between AC and MSME, a merger of the two

workstreams is proposed, with an expanded focus to include not only official payments but

unofficial ones as well.

23. There are two choices for Essor and DFID with respect to A2F:

i. maintain a reduced presence until ARCA and the Central Bank become more

receptive to Essor support in development of the regulatory framework for insurance

and focus on leasing activities in collaboration with ÉLAN; or

ii. seek other aspects of inclusive finance that it could support and in which it could

produce results within the two remaining years of project life.


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Table of contents

Acknowledgements i

Executive summary ii

Findings ii

Recommendations iv

Table of contents viii

List of figures and tables x

List of abbreviations xi

1 Introduction 1

1.1 Overview 1

1.2 MTE completion process and Terms of Reference 1

1.3 MTE report structure 2

2 The Essor project 3

2.1 Context 3

2.2 Overview of the Essor project 3

2.3 Essor's implementation model 3

2.4 Essor's Theory of Change 5

3 Summary of evaluation approach 9

3.1 The MTE Evaluation Questions 9

3.2 Summary of research activities for the MTE 9

3.3 Assessment of quality of evidence and evaluability issues 11

4 Summary of MTE Findings 12

5 Conclusions 18

6 Lessons and Recommendations 21

6.1 Lessons 21

6.2 Recommendations 21

Annex A Excerpts from the MTE Inception report 26

A.1 Essor MTE design 26

A.2 Essor Evaluation Matrix 43

Annex B Review of Research Methodology 51

B.1 Research activities for the MTE 51

B.2 Observations on MTE Process 54

Annex C MTE Findings 57

C.1 How well is Essor designed sustainably to improve the business environment? 57

C.2 Is Essor appropriately organised and managed to perform effectively? [Efficiency] 70

C.3 Value for Money (Efficiency): Is Essor likely to deliver value for money? 80

C.4 Progress Towards Results (Effectiveness): To what extent is Essor likely to deliver an improved business environment? 82

C.5 Is Essor's measurement and reporting system appropriate to improve implementation? 86

Annex D Value for Money 93


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D.1 How can the Essor VFM framework be strengthened? 93

D.2 To what extent is Essor on track to deliver Value for Money? 93

Annex E Political Economy Context Assessment 98

E.1 Introduction 98

E.2 Features of the political and institutional context 99

E.3 Findings of the PECA 101

E.4 Implications for assumptions in the ÉLAN and Essor Theories of Change 110

Annex F Additional information 113

F.1 Recent regulatory and policy initiatives 113

F.2 Bibliography and references 113

F.3 Summary of Essor MSME Survey Results 116


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List of figures and tables

Figure 1 Essor’s Theory of Change (Inception Report, 2015) 6 Figure 2 Essor's intervention logic and results chain 6 Figure 3 Essor's Theory of Change (Vision) 7 Figure 4 Essor's 'change journey' 7

Table 1 Essor workstreams 5 Table 2 MTE Findings 12 Table 3 Private Sector Development ‘Traps’ in DRC from DFID Business Case 64 Table 4 Features of Adaptive Facility and Essor Implementation 73 Table 5 Essor Senior Management Team Roles, Responsibilities, and Accountability 79


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List of abbreviations

A2E Access to electricity

A2F Access to finance

AC Anti-corruption

AfDB African Development Bank

AFEECO Association des Femmes Entrepreneurs du Congo

ANAPI Agence Nationale pour la Promotion des Investissements

ARCA Autorité de Régulation et de contrôle des Assurances (Insurance Regulation and Control Authority)

ASI Adam Smith International

ASSOFE Association de Femmes chef d'entreprise de la RDC

AVC Agricultural value chain

BCC Banque Centrale du Congo

BCDC Banque Commerciale Du Congo

BER Business environment reform

BMO Business membership organisation

CAFCO Cadre permanent de concertation de la Femme Congolaise

CCIM Chambre de Commerce, de l'Industrie et des Métiers

CENADEP Centre National d'Appui au Développement et à la Participation Populaire

CENI Commission Electorale Nationale Indépendante

CNONGD Conseil National des ONG de Développement de la République Démocratique du Congo

COPEMECO Confédération des Petites et Moyennes Entreprises Congolaises

CRONGD Conseil Régional des Organisations Non Gouvernementales de Développement

DB Doing Business index

DFID Department for International Development

DGI Direction Générale des Impôts

DGRAD Direction Générale des Recettes Administratives

DPSI Document de Politique et des Stratégies Industrielles


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DRC Democratic Republic of Congo

DSU Decision Support Unit

ECOFIN Committee on Economy and Finance of the National Assembly

EQ Evaluation question

EQUALS DFID's Evaluation Quality Assurance and Learning Service

ETD Entités Territoriales Décentralisées

EU European Union

FEC Fédération des Entreprises au Congo

FENAPEC Fédération Nationale des Artisans et Petites et Moyennes Entreprises du Congo

FGD Focus group discussion

FOLECO Fédération des Organisations non-gouvernementales Laïque à vocation économique du Congo

FPI Fonds de Promotion de l'Industrie

GAAD Groupe d'Appui et d'Accompagnement pour un Développement durable

GRIP Groupe de Recherche et d'Information sur la Paix

ICF International Coach Federation

ICG International Crisis Group

ICT Information and communication technologies

ILO International Labour Organization

IMF International Monetary Fund

LAC Lignes Aériennes Congolaises

MDAs Ministries, departments and agencies

MINOCONGO Minoterie du Congo

MNO Mobile network operator

MRM Monitoring and results measurement

MSMEs Micro, small and medium-sized enterprises

MTE Mid-term evaluation

MW Megawatt

NGO Non-governmental organisation


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NAIC Net attributable income change

OGEFREM Office de Gestion du Fret Multimodal

OHADA Organisation pour l'Harmonisation en Afrique du Droit des Affaires

OIF Organisation internationale de la Francophonie

ONC Office National du Café (national coffee body)

OPEC Office de Promotion de moyennes et petites Entreprises Congolaises

OPM Oxford Policy Management

PAP Programme d'Appui au Parlement

PECA Political Economy Context Assessment

PEF Plate-forme de l'Entrepreneuriat Féminin de la RDC

PME Petites et Moyennes Entreprises

PNDS Plan National Stratégique de Développement

PRMN Programme de Restructuration et de Mise à Niveau de l'Industrie

PSD Private sector development

PUSIL Programme d'Urgence de Soutien à l'Industrie Locale

PwC PricewaterhouseCoopers

RCCM Registre du Commerce et du Crédit Mobilier (Commercial and Movable Property Registry)

RVA Régie des Voies Aériennes

SME Small and medium-sized enterprise

SMT Senior management team

SNPME Stratégie Nationale de Développement des Petites et Moyennes Entreprises

SOFIDE Société Financière de Développement

TOC Theory of change

TOR Terms of reference

UCAB Union Congolaise des Armateurs des Baleinières

UN United Nations

UNDP United Nations Development Programme

VFM Value for money


ePact 1

1 Introduction

1.1 Overview

This document presents the findings and conclusions of the Mid-Term Evaluation (MTE) of the UK

Government's Department for International Development (DFID), Democratic Republic of Congo

(DRC) Essor project, which is a component of DFID's Private Sector Development (PSD) programme

in the DRC. Each component of the PSD programme is contracted and implemented separately:

• ÉLAN RDC, a £50 million, five-year market development project, implemented by Adam Smith International (ASI);

• Essor, a £35 million, five-year flexible facility aiming to improve the DRC's business enabling environment, implemented by Pricewaterhouse Coopers (PwC); and

• the Decision Support Unit (DSU), which supports the other projects with annual reviews,

evaluations, learning and adaptation activities, intended to improve implementation and increase

impact. The DSU is being implemented by Oxford Policy Management (OPM).

This report deals exclusively with the Essor component of the PSD programme. Separate MTE

reports are being produced for ÉLAN RDC (ÉLAN) and for the Private Sector Development

programme as a whole.

The purpose of the MTE is principally formative: to identify any constraints or risks to the

achievement of the objectives of the Essor project (and, by extension, the PSD) and to recommend

corrective actions where these are required.

The primary target audience for the mid-term evaluation report is DFID DRC, as the contractor of

this deliverable. The report's secondary audience is Essor. This aligns with the overarching purpose

of the MTE – to make recommendations for corrective actions to improve project results. Additional

audiences that may benefit from the evaluation findings include service provider private sector

partners and government counterparts, other donors and service providers implementing private

sector development initiatives, and the development community more broadly. While the MTE is not

executed expressly for these additional audiences, they are considered in the reporting and

dissemination plan.

1.2 MTE completion process and Terms of Reference

The Essor MTE process and report were managed and written by the DSU, which is operated by

OPM through the ePact consortium. The role of the DSU is:

• to provide DFID with impartial verification of PSD programme results;

• to play a learning function through conducting a mid-term and final evaluation and collating lessons learned; and

• to conduct research activities to understand the context of implementation in DRC.

The process of completing the Essor MTE proceeded as follows:

• selection and contracting of independent MTE Component Leads as core members of the MTE team, followed by briefing and document review in May 2017;

• an MTE Inception Mission to Kinshasa in June 2017;


ePact 2

• drafting of the MTE inception report in August 2017, its review by DFID's Evaluation Quality Assurance and Learning Service (EQUALS), and its finalisation incorporating EQUALS' comments and guidance in September 2017;

• preliminary data collection and planning for the MTE field mission during September 2017;

• the completion of the MTE field research mission by the MTE core team, 7–27 October 2017;

• drafting of reports on the research activities carried out as part of the MTE, October–December 2017;

• preparation of this first draft of the Essor MTE report by 15 December 2017;

• review and discussion of inputs provided by PwC and DFID in January–February 2018;

• completion of Annual Review in March 2018; and

• incorporation of inputs and final draft produced in April–May 2018.

The focus of the MTE and the selection of the EQs were informed by discussions with DFID, Essor

and other stakeholders during the MTE Inception Mission, as well as by the findings and

recommendations of the ÉLAN and Essor 2017 annual reviews undertaken in February 2017. No

separate terms of reference for the MTE was produced, but the statement of objectives and

evaluation questions (EQs) set out in the MTE Inception Report (and detailed further below) are

taken as providing the terms of reference and are presented in Annex A.

1.3 MTE report structure

The report is structured as follows:

• Chapter 2 summarises the Essor project, its objectives, main operating features and its implementation trajectory since inception. It describes and assesses the project's overall theory of change (TOC) as well as each of the sector interventions and their respective results chains;

• Chapter 3 outlines the evaluation approach pursued by the MTE and the key features of its implementation. This summarises the method that was applied for the completion of the MTE, and the process of data collection that was pursued;

• Chapter 4 presents a summary of the MTE findings;

• Chapter 5 consolidates and interprets the MTE's findings setting out the overall conclusions; and

• Chapter 6 outlines the main lessons and recommendations that should be considered by Essor

and DFID DRC in focusing and structuring the remainder of the project's implementation to

January 2020.

Additional material is included in the annexes. A set of annexes featuring Sector Performance

Reviews and Case Studies is submitted separately as a Technical Annex. The annexes included in

this report are excerpts from the MTE Inception Report (Annex A), the Review of the research

methodology (Annex B), the full MTE findings (Annex C), the Value for Money (VFM) assessment

(Annex D), the Political Economy Context Assessment (PECA) (Annex E), and additional information

supporting the report including the list of interviewees, a summary of the research findings cited in

the report, and the logframe (Annex F).


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2 The Essor project

2.1 Context

Decades of economic mismanagement and war have exacted a heavy toll on the economy of the

Democratic Republic of Congo (DRC). Despite average growth rates of 6% since 2002, official GDP

per capita is still the lowest in the world (US$231) – less than half of its 1980 value in constant terms.2

It is estimated that only around 300,000 people (less than 0.5% of the population) are employed in

formal micro, small and medium-sized enterprise (MSME) firms.3 A handful of large formal firms in

mining, banking and telecoms provide employment for those fortunate enough to secure jobs. The

remainder of economic activity (up to 90%) takes place 'below the radar' in the informal sector.4

2.2 Overview of the Essor project

Essor is a £35 million, five-year project launched in May 2015 and managed by PwC. It is a significant

component of DFID DRC's £100 million Private Sector Development programme, which also

includes ÉLAN RDC and the DSU. According to its original design set out in the business case for

the PSD programme, Essor was intended as a 'Flexible Facility which would, on an as-needed basis,

design and implement interventions in:

• Business environment reform (commencing with support to the Government of DRC for OHADA5 implementation);

• Access to finance; and

• Anti-corruption.'

DFID's terms of reference for Essor called for this flexible facility to design and implement demand-

led interventions to contribute to private sector development and poverty alleviation in DRC. This

work was to 'commence with a programme of support to the Government of DRC for the

implementation of OHADA law, practices and institutions … [and] to contribute to outcome indicator

1 of the logframe for DFID DRC's Private Sector Development Programme: to support DRC to reduce

its distance to the frontier of the World Bank Doing Business Indicators from 35 to 52.'

The beneficiaries of the project are described in the logframe as poor people in DRC with a focus on

MSMEs.

Essor’s Inception Report described the project as a 'continually evolving portfolio of interventions,

responsive to emerging opportunities. This is at the core of the adaptive programming approach set

out in DFID's Business Case.' The Inception Report noted that 'this approach makes it hard to predict

at the outset how the portfolio will look in subsequent years.'

2.3 Essor's implementation model

Essor's implementation model is based on the premise in the initial TOR that improvements in the

business environment, including expanded access to finance and reduced corruption, will stimulate

2 Figures taken from World Bank World Development Indicators. 3 World Bank (2012). While a range of definitions are used, the Government of DRC defines MSMEs as follows: Micro (1–5 employees, US$10,000 turnover); Small (6–50 employees, US$10,001–US$50,000 turnover); Medium (51–200 employees, US$50,001–US$400,000 turnover) (Schwarz, 2011). 4 World Bank (2012a). 5 OHADA is the Organisation pour l'harmonisation en Afrique du droit des affaires, or Organisation for the Harmonisation of Corporate Law in Africa.


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private sector development and reduce poverty in DRC. The original design concept as set out in

the PSD Business Case6 involved an adaptive, flexible facility that could work with different

counterparts, abandon activities afflicted by policy or institutional blockages when necessary, and

launch new activities more likely to succeed in a changing environment.

Essor’s inception report described the implementation model as follows:

'The core portfolio will consist of larger projects, each consisting of separate components

linked to the overarching outcome of that particular project. Each outcome will in turn be

nested within the overall private sector development (PSD) programme outcome. Our current

vision is that Essor will comprise around five to seven large projects;

These core projects will generally be active at both central and provincial levels (drawn from

DFID's priority provinces, recognising that there may be changes to these provinces). One

of our key flexibility levers will be to shift the geographical focus of a particular project

dependent on impact and buy-in; so far as possible we need to foster a sense of competition

between parts of government, and even between provinces, to make this happen.

In addition, we propose to support ad hoc projects outside of this main core portfolio of large

projects. It will take time to design the next round of projects (beyond the OHADA project) to

meet DFID's requirements. We recognise that this may be frustrating for our government

partners and will look to implement ad hoc interventions wherever possible to help maintain

momentum and relationships.'

The Essor Inception Report emphasised that 'improving business climate in the DRC is a key driver

of poverty reduction', and treated improving the business environment as largely synonymous with

improving DRC's ranking and distance to frontier in the World Bank Doing Business indicators. The

priority areas of action identified were:

• the ease of business registration,

• accessibility of data on the credit-worthiness of businesses,

• ease of winding up a business, and

• transparency and predictability in the legal system.

The Inception Report stated that Essor expects these changes will reduce the costs faced by firms

in DRC, improve their perception on the business environment and increase business investment.7

The approach set out in the Inception Report aims to focus 'on a small number of reforms which, if

implemented successfully, will result in benefits for a large number of MSMEs and individuals'. The

approach also aimed 'to work with government departments and agencies on 'demand-driven' policy:

legal and regulatory reform that focuses on targeted MSMEs, sector, and provinces. The project will

focus on reform of specific policies, legislation, and regulation that will have the highest impact,

covering large populations.'

Essor had initially established seven workstreams, by the time of the 2016 Annual Review, as shown

in Table 1. The selection of workstreams was based on the findings of a survey8 of micro, small and

medium-sized enterprises (MSMEs) which identified obstacles. Essor's work has been structured

around these obstacles – there is at least one workstream targeted at addressing each obstacle.

6 See Annex C.3 for brief discussion of an Adaptive Facility and Essor's implementation of the concept. 7 Essor Inception Report, April 2015. 8 A survey of 920 MSMEs in Kinshasa, Bandaka, Lubumbashi and Goma.


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Table 1 Essor workstreams

Investment climate obstacle

Workstream(s) Workstream objective

Corruption Anti-corruption Reduce resources lost to corruption through improved fiscal burden and

anti-corruption reforms

Customs procedures and commercial regulations

Agricultural value chains reform

Anti-corruption

Traders face a reduced trade burden and experience a more credible,

transparent and equitable regulatory system

Access to electricity Access to electricity Businesses benefit from improved

public procurement process and increased access to electricity

Access to finance Access to finance

OHADA

Businesses can access financial

services (credit, insurance, leasing, investor protection) that are more

cost-effective, more equitable and more accessible.

Taxes and fees MSME support

Anti-corruption

Tax policies and regulatory

frameworks are streamlined and operate with more transparency,

equity, reliability and accessibility

Heavy administrative burden OHADA Construction permits

Anti-corruption

Business registration services are more cost effective, transparent,

reliable and accessible

Source: 2016 Annual Review of Essor.

Essor's activities to date have been limited to Kinshasa, Lubumbashi and Goma. Each of the six9

workstreams are active in Kinshasa.

Agencies are public sector bodies that are the main counterparts for project activities. Essor

collaboration with these agencies is outlined under memoranda of understanding or 'protocôles

d'accord'. Partners are, for the most part, other donors or donor-funded projects, which work in the

same thematic areas as Essor, and which coordinate with Essor and with one another. Partners may

also be Congolese NGOs, which help Essor teams (in field surveys, for example), but whose

members are also, typically, intended beneficiaries of the project. BMOs are business membership

organisations such as chambers of commerce or sector/industry associations, which play a similar

role to that of other Congolese NGOs in that they assist Essor in field research and related activities,

but whose members are also intended project beneficiaries.

2.4 Essor's Theory of Change

2.4.1 Steps in the development of Essor’s Theory of Change

No complete statement of Essor’s Theory of Change (including a full identification of critical

assumptions) had been articulated by the time of the MTE. Essor’s Inception Report presented the

Theory of Change as shown in Figure 1. It was described as follows:

“Essor’s desired impact is to reduced poverty through improved incomes for the poor. At the

outcome level, Essor’s theory of change is that improving business climate in the DRC is a

key driver of poverty reduction. Key aspects of the business environment that could be

9 Essor started with seven workstreams, but abandoned Construction Permitting when conflicts over jurisdiction between central and provincial governments made implementation impossible.


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improved include the ease of business registration, accessibility of data on the credit-

worthiness of businesses, greater ease of winding up a business, and improved transparency

and predictability in the legal system. Essor expects these changes will reduce the costs

faced by firms in DRC, improve their perception on the business environment and increase

business investment.”

Figure 1 Essor’s Theory of Change (Inception Report, 2015)

No assumptions related to the Theory of Change were explicitly articulated. The “Risk Register” in

the Inception Report set out a large number of risks but these were not explicitly tied to particular

steps in the intervention logic.

Essor produced a draft 'Theory of Change and Vision' document in April 2017. This set out the

‘Vision' shown in Figure 2 which is based on the notion that the key underlying problem to address

is a poor business environment, which impedes the recovery and growth of the private sector, which

in turn restricts business opportunities for people and inhibits poor people's opportunities to increase

their income and improve their livelihoods.

Figure 2 Essor's intervention logic and results chain

Source: adapted from PwC 'Essor Theory of Change and Vision', draft, 17 April 2017.

The vision placed emphasis on public–private dialogue (PPD) as a critical process in prioritising and

building political support for specific reform initiatives, as shown in Figure 3.

Policies improved to enable priority reform for businesses

Agencies and partners improve processes and procedures to enhance service to business

Agencies, BMOs and providers of services to businesses have capacity to raise awareness and deliver reforms to MSMEs

MSMEs and poor people realise the benefits of reform

Increase in cumulative net income for MSMEs and poor people


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Figure 3 Essor's Theory of Change (Vision)

Source: adapted from PwC 'Essor Theory of Change and Vision', draft, 17 April 2017.

A further statement of the envisaged steps in the intervention logic is set out in Figure 4, which again

starts from a process of policy reform.

Figure 4 Essor's 'change journey'

Source: PwC, 'Essor Q1 2017 Quarterly Report', 2017, p. 4.

Essor's 'Vision' document of April 2017 is again, however, not explicit about the assumptions behind

this “Theory of Change”. Essor has therefore not succeeded in articulating an adequate Theory of

Change that provides a basis for critically examining the plausibility of its intervention logic and the

PwC

Theory of change

2

If GoDRC identifies and prioritises relevant

Reform for MSMEs, and

Improves the legislative framework

for those reforms, and

Improves processes and operating

framework to enact the legislation, and

Improves its capacity to deliver the services

& inform businesses of their availability , then

Support Government to engage with private sector organisations through

consultations and PPD (Project Level and Workstream Level)

Support Government to review, draft and adopt improved legislation to

enact the priority reforms.

Support Government to review, draft and adopt new operational

frameworks to deliver better services to businesses.

Build the capacity of Government to deliver services that are more transparent, cost-effective, accessible and equitable and inform businesses that these services are available and how to access them

Business will receive more cost-effective, accessible, equitable and reliable services from GoDRC, removing

obstacles to investors and decreasing costs

What Essor will do:

As a result of these changes, there is an improved business climate that fosters economic opportunities for poor people, with a focus on MSMEs and women. Demonstrated by:

• Savings in time and costs to businesses measured by selected indicators

• Perceptions of Essor’s target MSMEs on reduced obstacles and costs.

• Links to job creation, incomes, improved justice and poverty reduction INCOME GENERATION, JOB CREATION

POVERTY REDUCTION


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risk underlying it. As discussed in the Technical Annex, while each intervention to varying degrees

(most fully for OHADA) articulated steps in the intervention logic, it does appear that any of them

systematically analysed the key assumptions underlying the intervention logic.

2.4.2 Underlying assumptions

In the absence of an adequate and complete articulation by Essor of its Theory of Change, the MTE

Inception Report (Table 8, p. 36) analysed the assumptions in the Essor logframe (as it was set out

before the subsequent revision in September 2017). These were classified as broadly falling into the

following categories:

1. There is sufficient and sustained political support for BER: e.g. 'Buy-in to reform agenda

can survive turnover in institutional leadership; Key actions are politically feasible to achieve;

Essor interventions do not become politically sensitive; Resistance to reforms by those with

vested interests in maintaining the status quo or reversing reforms can be mitigated.'

2. Effective public–private dialogue is feasible: e.g. 'MDAs are open to receiving and

incorporating dialogue from the private sector; The private sector is willing to engage with the

public sector and believes it is worthwhile; Awareness of issues is sufficient to stimulate

reform actions; Fear of reprisals does not limit sharing of critical inputs by MSMEs.'

3. Institutional capacity for implementation is developed to, and maintained at, a

sufficient level: e.g. 'High rates of turnover at MDAs do not occur or, if they do, do not negate

the benefits of capacity building for the target MDAs; Officials have interest and find value in

developing skills in areas relevant to Essor-supported reforms; The work environment allows

trained officials to apply their skills for reform actions.'

4. Economic and security environment is sufficiently favourable: e.g. 'Local and global

security and macroeconomic conditions do not undermine stability and economic growth.'

5. Business environment reforms appropriately target and address key obstacles.

In addition, the following core assumptions were identified as underlying the intervention logic linking

business environment reforms to poverty reduction:

1. A poor legal and regulatory environment (including policies, laws, and regulations and their

implementation and institutional setting) is the main obstacle to MSME development, poverty

reduction, and improvement in livelihoods.

2. Business environment reforms will lead to improved economic performance and hence to

poverty reduction.

3. MSMEs (many currently in the informal sector) will be beneficiaries of business environment

reforms and the vehicle through which increased economic activity and higher household

incomes will be achieved.

4. The World Bank Doing Business indicators are a reliable proxy for DRC's business

environment, and advances in DRC's Doing Business ranking or distance to the frontier will

reflect a meaningful improvement in the conditions in which MSMEs operate.


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3 Summary of evaluation approach

This sector summarises the evaluation questions (EQs) that guided the MTE and the research

activities undertaken to provide the evidence for answers to these EQs.

3.1 The MTE Evaluation Questions

The MTE Inception Report sets out the EQs. The headline EQs for the MTE are:

1. How appropriately is Essor designed sustainably to improve the business environment?

2. Is Essor appropriately organised and managed to perform effectively?

3. Is Essor likely to deliver value for money?

4. To what extent is Essor likely to deliver an improved business environment?

5. Is Essor's measurement and reporting system appropriate to improve implementation?

6. How can Essor's impact on the business environment be measured in a final evaluation?

The full list of the EQs is presented in Annex B.

3.2 Summary of research activities for the MTE

Nine research activities were employed to obtain sufficient evidence to answer the evaluation questions:

1. A review of literature on business environment reform and its connection to economic

performance, MSME development and poverty reduction: The literature review examined

evidence from peer-reviewed publications and research reports by donor agencies, through

the lens of the evaluation questions. It included evidence from international experience in a

wide range of developing countries, as well as more specific evidence from DRC, where

available. The full literature review has been presented as an Annex to the ÉLAN MTE report.

2. A political economy context assessment (PECA): The PECA was based on a review of

literature (academic studies and analyses as well as documents and reports from national

and international organisations) addressing the key issues relevant for testing ÉLAN and

Essor projects' theory of change assumptions, and the overall PSD programme-level

assumptions. The key topics researched were governance at national and local levels, state–

society relations, rule of law and corruption, business environment, livelihoods, poverty, and

social capital. A review of documents was mainly based on research publications from

international institutions (AfDB, UNDP, IMF and World Bank), international NGOs (ICG, Mo

Ibrahim Foundation), and internationally recognised experts and academics, as well as on

legislation and regulations adopted by the Congolese State. The analysis included

documents published after 2010 with a focus on the most recent studies conducted the last

two or three years. The PECA report is presented in Annex E.

3. Six sector performance reviews (of which three are included under the more

comprehensive intervention case studies): As the MRM was only finalised for most

workstreams in November 2017, it has not been possible to assess achievements of the

different sectoral interventions. Instead, these performance reviews sought to assess the


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validity of the intervention logic and the key underlying assumptions, with the aim of

evaluating the potential of each workstream or intervention to achieve MSME development

and poverty reduction through business environment reform. These are included in the

Technical Annex.

4. Three intervention case studies: In consultation with Essor's senior management team in

Kinshasa, the MTE team identified specific interventions to serve as the focus of detailed

case studies. Together with the Theory of Change assessment and the sector reviews, the

case studies were instrumental in testing the validity of Essor's intervention logic and

implementation model. The case study subjects were selected based on their maturity (the

extent to which implementation activities were well underway), and their expected impact. It

is important to note that the expected impact of the selected interventions was not considered

solely, or even mainly, in terms of aggregate net attributable income change (NAIC), but

instead looked at their probable effect on business creation, employment, investment and

GDP growth. Since Essor's MRM system was not established in time for the MTE, the case

studies were primarily based on the assessment on Essor quarterly and annual reports,

including reporting against logframe indicators. Intervention case studies are included in the

Technical Annex.

5. Interviews: The Essor MTE evaluation team conducted focus group discussions and one-

on-one interviews with private and public-sector beneficiary and partner organisations

involved in each of the workstreams. The MTE team also interviewed the senior Essor staff,

and key staff members of each of the Essor workstreams – in most cases both during the

inception mission in June and the evaluation mission in October – as well as the Essor senior

project management team.

6. Results verification exercise: The Essor MRM was not in a position to be verified until

November 2017 and so the full MRM was not available to inform the MTE process. The

results verification was carried out by the DSU. It assessed all Essor interventions, including

the quality of results reporting and an assessment of the validity of modelled estimates of

impact. A draft of the Essor verification report was submitted to DFID on 1 December 2017

and approved on 11 December 2017.

7. Management and organisation review: The assessment sought to identify strengths and

weaknesses of overall project management as well as: (a) the procedures by which

interventions and partnerships have been identified and approved; (b) management of

relationships and partnerships critical to successful implementation; (c) effectiveness of

mobilisation of stakeholder support; (d) the extent and effectiveness of coordination between

ÉLAN and Essor; and (e) the appropriateness of the project reporting system. The

assessment was based on discussions with DFID DRC and with Essor senior management,

technical leads and key public and private sector counterparts.

8. A Value for Money assessment of Essor: The VFM assessment reviewed the Essor VFM

framework. This was complemented by interviews with the Essor project team, and a further

document review to assess the extent to which the framework influenced management

decisions as well as allowing for a broader assessment of the project's VFM performance.

The full assessment is presented in Annex D.

Annex B includes further description of the research activities undertaken during the MTE, while the

MTE Inception Report sets out in full the methodology and data collection methods used for the

MTE, including considering the ethical, cultural and gender-sensitivity aspects for research

implementation.


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3.3 Assessment of quality of evidence and evaluability issues

The lack of an effective MRM system was a major constraint on the quality of evidence available for

the MTE. No document repository existed so it was difficult and time consuming to compile full

documentation on Essor activities. At the time of the MTE a new logframe had been developed but

there had been no reporting yet against this and the accuracy of available reporting information (in

annual and quarterly reports) against earlier versions of the logframe was difficult to judge. While

extensive, in-depth interviews were conducted with Essor staff and external key informants to inform

the sector performance reviews and the case studies, it was generally not possible to triangulate

opinions from interviews with more objective sources of information – reflecting the limited progress

with implementation. Consequently, the MTE has relied mainly on primary data collected by the

evaluation team in the performance reviews and case studies, as well as the literature review and

supplemental desk research.

An MRM system that involved establishing a repository of documents related to the justification of

logframe results was established by November 2017. However, this did not systematically include

any wider documentation – for instance regarding results chains, theory of change testing,

intervention summaries, impact modelling, political economy analysis or studies of specific key

issues such as gender. The MRM system even when established was thus of limited value for MTE

purposes.


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4 Summary of MTE Findings

This section summarises the findings from the MTE, presented as answers to the EQs. The full list

of the MTE findings is presented in Annex C.

Table 2 MTE Findings

EQ # EQ Answer

1 How well is Essor designed sustainably to improve the business environment?

Despite addressing to an extent seven out of the eleven Private Sector Traps identified in the DFID business

case10, Essor is not well designed to improve the business environment because the project:

• Lacks a systematic programmatic approach to private sector engagement and the identification of key challenges and obstacles to reform;

• Lacks a robust and flexible system to adjust resourcing and planning based on traction of the interventions;

• Failed adequately to articulate a theory of change (including most critically the key assumptions) and to use it to guide implementation;

• Did not engage effectively with the challenges of instability, lack of political commitment to BER reform, lack of capacity and the lack of effective voice for MSMEs in policy processes; and

• Did not develop a design approach that is specific enough about identifying and prioritising the BER issues which will most assist MSMEs.

1.1 To what extent is Essor’s design based on a valid Theory of Change?

BER does directly address one of the four binding constraints to growth for DRC (government failures)

described in the literature review and can impact two others by improving the environment for the private

sector to invest in infrastructure and finance, as Essor is attempting to do in its A2F and A2E interventions.

However, Essor did not fully articulate an adequate Theory of Change that highlighted and provided a basis

for testing and reviewing critical assumptions. This was a fundamental implementation weakness. Essor’s

interventions have been implicitly based on assumptions about political commitment, capacity, the

challenges of engaging with the private sector and fragility that have not been critically examined and that

are highly problematic in the DRC context.

1.2 Has prioritising government as a key partner and beneficiary compromised the

ability of the project to achieve its objectives?

Government is a key partner and beneficiary and should be prioritised, but this should not be at the exclusion

of the private sector which needs significant support to properly engage in the identification and prioritisation

of issues, which we have identified as key to the success of BER in FCAS. The risks of working with the

Government were anticipated and mitigated in the original project design, which highlighted public–private

dialogue as a key tool for the programme and proposed an adaptive design based on learning by doing,

and the ability to adjust resourcing to programme traction and experience with government partners,

supported by a comprehensive MRM and MSME survey process to support its decision making.

However, a lack of systematic and effective engagement with the private sector has impacted the ability of

the project to achieve its objectives. Interests of beneficiaries have been partially incorporated into

intervention design. Several Essor workstreams have taken as their point of departure the binding

10 See Annex C.1 for a table of the Private Sector Development traps identified in the business case


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constraints identified by business operators themselves. Only one, anti-corruption, has designed

interventions that focus on the specific needs of women entrepreneurs. A2E has been engaged in

discussions with potential investors, suppliers, and other private sector stakeholders. The political context

is one in which the interests of MSMEs, the poor and women have little influence in the policy process and

Essor is not working on strengthening their capacity to advocate and engage in policy reform and progress

on gender has been slow and not well measured.

1.3 To what extent are the assumptions informing project design proving valid in

practice?

It is too early to tell if the interventions are generating the targeted impacts because of the limited progress

in implementation.

The political context of DRC does not favour BER and there are substantial obstacles to public–private

dialogue with MSMEs as a means of building political consensus. This does not mean that political support

for some reforms is impossible to achieve, but opportunities may be limited and dependent on alignment

with the interests of the politically influential. Similarly, the political context is likely to militate against effective

capacity development in public sector organisations.

2 Is Essor appropriately organised and managed to perform effectively?


• Effectively managing a £35 million BER project in DRC is one of the more challenging tasks in

development.

• Essor does not have an effective senior management team (SMT) driving project delivery in

Kinshasa. Team leadership has been part-time until February 2018 with little senior support and

limited authority over the workstreams.

• Both DFID and PwC London have made interventions which have had the effect of further

undermining in-country project team leadership.

• The lack of an effective SMT has resulted in weak strategic leadership and a lack of workstream

accountability.

Placing a full-time, francophone Team Leader (TL) in the project is a necessary but insufficient condition to

improve Essor. It also requires a powerful SMT to support the TL and for this team to have the autonomy to

manage the project.

2.1 Does Essor have the capacity and organisational arrangements to implement an

adaptive project and its workstreams and interventions?

From inception Essor has not been designed around the principles of an adaptive facility with overreaching

objectives, and flexible interventions. The lack of an effective MRM system impeded learning and adaption,

as has the lack of stable local management.

2.2 Does Essor have operational processes in place to ensure its portfolio is trimmed

and/or expanded strategically over time to achieve its objectives?

Essor does not have any such processes in place. Essor management did close the Construction Permits

workstream once it became apparent that further progress was impossible, but that was an isolated case.


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2.3 How are partner and stakeholder relationship management processes affecting

project performance?

Essor has not defined or applied standardised processes for the management of partner and stakeholder

relationships. A proper set of such processes would start with the criteria for selection of public sector

partners, which emphasise their willingness to effect change; the institutional context (i.e. can a potential

partner make change happen largely on its own or does change depend on the cooperation of other bodies,

some of which may resist reform?); the potential to achieve desired impacts by working with a given partner;

and the operational, financial, and reputational risks of a failed relationship. The absence of any such

processes has resulted, variously, in poor choice of partners, poor follow-through of Essor teams with

partners; and inability of Essor teams to gain traction with chosen partners.

2.4 How effectively is Essor coordinating with ÉLAN to enhance performance and

achieve results?

Although it is understood that there is regular communication between the two projects there is little evidence

that this has led to effective joint action, despite the substantial overlap in sectors and thematic areas in

which the two projects operate. There have been some instances of effective cooperation such as on the

coffee export tax. However, otherwise ÉLAN has launched market systems interventions without BER

constraints having been addressed.

2.5 Does Essor have the capacity and organisational arrangements to implement

workstreams and their interventions?

At the time of the MTE, the project did not have the capacity and organisation arrangements to implement

the project. The main problem for Essor has been the lack of a senior full-time project manager to help steer

the project and adapt programming to opportunities and progress within a complex and fragile environment.

Essor also lacked a functioning MRM system for most of the early years of the project, as well as an

appropriate process for adapting resourcing and programming.

3 Is Essor likely to deliver Value for Money?

Overall the project is unlikely to deliver Value for Money on its current trajectory. Only two workstreams

(OHADA and A2E) have made reasonable progress, while all others have either already closed down or do

not yet have compelling evidence to suggest they are on track to deliver any impact. There are major

weaknesses with the management of the project despite this representing around one-third of the project's

costs. For the OHADA and A2E workstreams, the nature of potential benefits needs to be more rigorously

set out to allow a more evidence-based judgement of the extent to which these specific interventions might

be achieving VFM.

3.1 How appropriate is the Essor Value for Money framework?

Overall Essor's VFM framework requires some modifications to be more relevant to both guiding and holding

to account project implementation. Most important at this stage of the project, however, is simply that data

should be consistently reported against the indicators, so progress can be meaningfully assessed.

3.2 How effectively is the Essor Value for Money framework used to inform project

management?

Given that the project's VFM framework was not fully developed until early 2017 and reporting against it has

been limited beyond the Economy level (i.e. cost of inputs), it has not been a key driver of project decision

making. That is not to say that the principles of VFM have not been followed during project implementation,


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but the lack of structure to monitor the adoption of these principles has restricted their potential influence in

improving overall management decisions.

3.3 To what extent is Essor on track to deliver Value for Money?

Overall the project appears to be substantially off track to deliver VFM. Essor has made slow progress since

it began in January 2015, as set out elsewhere in this evaluation. Although there has been some

acceleration of activity in the last year, and the OHADA workstream has broadly met original expectations,

the project overall remains clearly behind originally intended timelines.

4 To what extent is Essor likely to deliver an improved business environment?

DRC advanced from 96th in the world in 2017 on the DB dimension 'Starting a Business' to 62nd in the 2018

DB report – a result of business registration reforms that were, in large part, designed and implemented by

the OHADA team. Given the extremely fragile and challenging environment in which Essor is operating, this

is a significant achievement for the project. Overall, Essor is likely to deliver some improvements in DRC's

business environment but not to the extent envisaged in the MRM. Improvements include reduction in the

time and cost of business registration and increased access to finance through creation of a collateral

registry (OHADA); creation of a framework for public–private partnerships in renewable energy systems

(A2E); reduction in the coffee export tax (AVC); and, potentially, reduction in corrupt practices at a key

border crossing (AC) and reduction of the multiplicity of local government taxes and fees (MSME).

4.1 To what extent are Essor workstreams and interventions effectively targeting the

most relevant constraints?

The Essor workstreams are broadly targeting the relevant constraints. An Essor survey of 900 MSMEs found

that access to finance and electricity were the most pressing concerns of enterprises.

However, selecting the appropriate strategies and interventions to make progress in these broad areas has

been less effective (see Technical Annexes). The interventions could be more effectively targeted by (a)

closer engagement with the private sector (only the AC workstream has involved the design of interventions

in close consultation with intended private sector beneficiaries); and (b) closer collaboration with ÉLAN on

addressing the market failures within the finance and agricultural sectors.

4.2 To what extent are the logic and assumptions linking interventions to intended

results valid and being borne out in practice?

It is too early to tell if the interventions are likely to generate the targeted impacts. While progress against

milestones was reported as over-achieved at the most recent Annual Review (output 3.2), the data

verification exercise had low confidence in the validity of these indicators. The Annual Review gave poor

marks to a number of interventions that technically met or exceeded their milestones, and found that only

two out of the five workstreams had made significant progress (OHADA and A2E).

As the literature review and workstream case studies and performance reviews have discussed, the effects

of BER on poverty reduction and increased MSME business activity (as measured by employment, output,

investment, or other indicators) are unclear. Business environment reforms, including several of those

supported by Essor, are likely to benefit companies in the formal sector, especially larger ones, more than

small and micro-enterprises, particularly those in the informal sector.

Both the A2E and OHADA workstreams have a fairly robust intervention logic and, if successful, are likely

to lead to measurable impacts, even if those impacts are not fully captured in the MRM indicators. OHADA’s

streamlining of company registration, digitisation of company records and the accompanying creation of a

collateral registry may facilitate increased formalisation and an expansion of business access to finance,


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while the expansion of reliable, affordable electricity via solar PV mini-grids will have a direct positive effect

on business creation, investment, and employment, and on household incomes in the areas served by these

installations. To the extent that other Essor interventions do lead to achievement of the intended results,

their effects, as argued in the case studies and performance reviews, are likely to be modest.

4.3 To what extent are interventions already prompting changes in the business

environment?

The OHADA workstream has already achieved significant results with its work supporting a substantial

improvement in the Doing Business ranking for DRC but the potential impact is unclear. For other

workstreams, it is not yet possible to test the logic and assumptions of any Essor interventions in terms of

impacts, since none of the workstreams have progressed far enough to produce measurable impacts, which

is to be expected at this stage of the project – BER can be a lengthy process, with results that may not be

apparent within the life of a project. The evidence on whether other interventions are on track to achieve

impact is more generally unclear or unconvincing.

4.4 Are there any unintended consequences resulting from Essor’s interventions?

The MTE has not identified any unintended consequences.

5 Is Essor’s measurement and reporting system appropriate to improve

implementation?

The Essor MRM system has not been appropriate or effective for improving implementation. A functional

MRM system was not in place until the end of 2017.

5.1 Does the logframe facilitate adaptive management of Essor?

The logframe facilitates adaptive management to a limited extent as the impact and outcome indicators

are mostly common to different interventions, with progress of the individual workstreams measured by the

achievement of milestone results and delivery of interim impacts and outcomes.

The logframe does not lend itself to comparison of achievements across the different workstreams to

enable readjustment of resources based on traction of the different workstreams. This is due to lack of

attribution of results. NAIC cannot be attributed to specific Essor interventions with reliability. The logframe/

MRM is more accurate in its attribution of output and outcome indicators; however, the most recent Annual

Review criticised the use of these indicators as a measure of success precisely because they do not provide

any meaningful gauge of success and eventual impact, and therefore cannot facilitate adaptive

management.

Typical characteristics of logframes in adaptive programmes like that envisioned for the Essor Facility

include: use of a high-level 'framework' logframe supplemented by more detailed 'nested' logframes;

'harvesting' results retrospectively; a portfolio or 'basket' approach to outputs; and the use of process-related

outputs focused on learning and adaptive management. Logframes should be viewed as active

management tools which are frequently changed and updated.11

Does the logframe allow for flexibility in adjusting implementation, closing-out or replacing

interventions and workstreams?

There is potential to modify the logframe as the project develops, and add additional interventions and

workstreams but no mechanism to support such decision making. The MRM does not measure the relative

11 Donovan and Manuel (2017) Adaptive Programming and Business Environment Reform – Lessons for DFID Zimbabwe, ERF, April.


ePact 17

contributions of different workstream interventions to project results or impacts. This is partly a fault of the

logframe itself and its reliance on NAIC and similar impact indicators, which cannot reliably be attributed to

specific interventions, but also reflect the lack of attention to developing adequate specification of the Theory

of Change underlying the project and its interventions.

5.2 Is the way in which indicators are being measured and reported providing an

accurate reflection of project performance?

To date the measurement system is not providing an accurate reflection of project performance. The data

verification exercise indicated low confidence in the accuracy of the data being collected by the monitoring

and results management system. The system is new, having been approved by DFID in December 2017,

and so therefore it may take some time to iron out data collection and quality issues.

5.3 To what extent does the MRM system contribute to learning and improving project

performance?

The MRM has not contributed much to learning and improving project performance. There are embedded

logframes which track performance of each workstream but at the time of the MTE these had not been

implemented.

The MRM was adopted less than a month before the MTE was completed and it is too early to render an

opinion on this. The MRM as demonstrated to the evaluators was based on Microsoft Excel, with supporting

documentation (pdf and Word files, images, and spreadsheets) held separately in a shared Dropbox folder.

The difficulty of navigation of this system limits its utility as a management tool. Essor is apparently in the

process of migrating the MRM from Excel to an SQL database, which should make it easier to generate

real-time reports that would facilitate adaptive management of the project.


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5 Conclusions12

Essor's performance has been compromised by weak management and oversight, the failure to fully

articulate an adequate theory of change, which ensured critical assumptions were confronted and

reviewed, and the absence of an effective MRM system. Overall there is little sense that the different

workstreams were conceived or have been executed as part of a single project with a common,

coherent set of objectives.

Design conclusions

1. Essor, as it has been implemented, has departed substantially from the original concept,

expressed in the terms of reference, of an adaptive, demand-driven, flexible facility. It is

not effectively demand-driven, in that, although some interventions have apparently been

undertaken at the request of one or another public-sector entity, other interventions do not clearly

respond to a genuine private sector need or a binding constraint to private sector growth. Essor

has in practice locked itself into a small number of interventions whose scale and level of

commitment limit the scope for flexibly exploring new opportunities. Essor has not instituted a

clear process to evaluate interventions so that they can be scaled up or abandoned based on

their performance or potential.

2. Essor's theory of change has been unclear throughout its implementation, even in the

version produced in Q2 2017. As a result, the challenges of working with (in particular) a small-

scale private sector with marginal political influence in a situation of limited government

commitment to business environment reform and endemic capacity weakness have not been

explicitly confronted.

3. Design of workstreams: Essor has successfully initiated two key activities (A2E

workstream and the leasing intervention within A2F) which could potentially have far-

reaching effects on poverty reduction and yet whose results do not fit well into the logframe.

For example, access to reliable and low-cost power, for which A2E is helping to prepare the

regulatory and institutional framework to attract private participation in development and

operation of solar PV networks, will benefit both businesses and households, but not exactly in

the way envisaged in the Essor TOC or the logframe indicators. Individual entrepreneurs and

poor households will benefit, but indirectly, and mainly because of greater employment or

subcontracting opportunities with larger firms. Households may benefit directly to the extent that

they are now connected to the grid and consequently enjoy a better quality of life, but this cannot

be measured in NAIC, which for A2E is calculated as the savings to consumers of using cheaper

solar grid power as compared to much more costly use of diesel generators. The A2F leasing

intervention could be instrumental in improving access to finance for businesses, especially now

that it is supporting the legal and regulatory framework for leasing market interventions by ÉLAN,

but the impacts may not be reflected in the logframe.

4. The AVC workstream, though it succeeded, jointly with ÉLAN, in reducing the coffee

export tax, was based on a flawed TOC, which identified the difficulty and high cost of exporting

as the binding constraint for the coffee sector in DRC. The business case then proposed a two-

fold intervention, one part of which focused on restructuring and reinforcing ONC, and the other

part of which focused on increasing the integration of DRC coffee producers and exporters into

regional value chains, though this was never demonstrated to be a binding constraint. In addition,

the main beneficiaries of the reduced coffee export tax are the 20 or so coffee traders that handle

the bulk of official exports rather than coffee producers themselves. The capacity building and

restructuring of ONC, though it is in its early phases, shows promise, especially given ONC's role 12 The supporting arguments and evidence behind these conclusions can be found in the annexes.


ePact 19

as the main government coordinator and regulator not only of coffee but of 20 other cash crop

value chains. Essor research13 has also contributed to ONC's understanding of the high potential

of Robusta coffee, formerly the main coffee variety produced in DRC, which, although it

commands a lower price, can be grown on a much larger scale and at a lower cost.

5. Lack of access to finance emerged from the MSME survey conducted by Essor as the second

most important constraint to MSME development, after lack of access to electricity. However,

the Theory of Change for A2F interventions lacks detail on how a virtuous circle of

progress can be achieved, and does not indicate why the A2F interventions selected are

the most appropriate ones. The three A2F interventions do not flow logically from this theory

of change, and have not been designed to address the main problems correctly identified in the

theory of change. The inclusive insurance component addresses an issue of limited relevance

to the private sector in general, and of less relevance to the MSMEs that are meant to be the

targets of the workstream. For the MSMEs, the potential for leasing may be limited, although

such products have had a positive impact on low income groups elsewhere.14 The ÉLAN

project plans to launch a leasing product in DRC in 2018, and may enlist Essor's help in ensuring

that the appropriate legal and regulatory dispositions are in place. This would be a good

collaborative intervention for Essor and ÉLAN.


6. Essor has suffered from high management turnover. It has failed to put in place a senior

management team capable of knitting together the disparate workstreams into a coherent whole

with a common strategic vision. Both at the senior management level and in the individual

workstreams, too many key staff members have been part-time and/or non-resident. It is hard to

bring about real change using a fly-in, fly-out model of delivering technical assistance and

support.

7. In practice, although Essor's performance indicators are meant to be disaggregated by sex, and

although poor populations and, especially, women are meant to be the primary beneficiaries of

its interventions, there is little evidence that most of its interventions are designed explicitly

or effectively to benefit women. There is, furthermore, no gender indicator in the logframe.

Indicator 5.1 should include a specific reference to gender inclusivity. Overall, Essor's progress

in the achieving gender and inclusion objectives has been (a) slow, even considering the

challenges of working in the DRC context, and (b) not well measured. Notable too is the fact that

at a workstream level, most of the Essor gender-related activities focus on training and

sensitisation, with less focus on the concrete and facilitative actions which are likely to produce

more transformative change.

8. Essor did not put in place an MRM system until November 2017, nearly three years after

project inception. Since the system had yet to be populated with data at the time of this

evaluation, it is impossible to judge its appropriateness and its ability to capture relevant data.

The many iterations of Essor's logframe have failed to put in place indicators that can accurately

reflect genuine project achievements when they occur.

Implementation Experience

9. Essor implementation has been slow. The Essor Annual Review conducted by the DSU in

February 2017 observed that 'Overall the project has established a firm basis for action, but aside

13 From discussion with the senior AVC and ONC staff. Discussed in the Technical Annex on AVC. 14 PropCom (2011, 'Making tractor markets work for the poor in Nigeria', https://www.enterprise-development.org/wp-content/uploads/tractor_case_study.pdf, Retrieved 17 April 2018.

https://www.enterprise-development.org/wp-content/uploads/tractor_case_study.pdf

https://www.enterprise-development.org/wp-content/uploads/tractor_case_study.pdf


ePact 20

from the strong progress made on the OHADA project, less has been achieved than we would

have hoped for. The project has failed to meet any of its logframe targets. This is in large part

due to a failure to update the logframe to set more realistic targets for the first full year of the

programme.'

10. Essor's relative lack of progress has been attributed, by DFID and the project team, to events

and conditions outside the control of project management and staff, including: 'the changing and

complex political environment in which Essor has been operating – in particular issues with the

signing of the agreement with the Government of DRC and the dissolution of the Comité de

Pilotage pour du Climat des Affaires et des Investissements (CPCAI), the body under the Minister

of Plan charged with coordinating and evaluating business environment reforms, and the

programme's key interlocutor.' DFID also reduced its spending on the DRC programme during

FY 2015/16, and instructed Essor to 'go slowly' on the portfolio outside of the OHADA

workstream. These events have certainly slowed implementation, but Essor management has

failed to craft effective responses to these challenges.

11. After three years the OHADA workstream has shown significant progress in

implementation, as has A2E through its improvement of the legal, commercial and financial

environment for the development of independent solar electricity generation and distribution

grids.

12. The anti-corruption (AC) workstream has established close cooperation with numerous

BMOs and NGOs, with an emphasis on those that focus on women in business. The AC

workstream has been working collaboratively with many beneficiaries but it seems to have

spread itself too thin, both geographically and thematically. It does not have sufficient resources

to pursue all the reform opportunities that present themselves, and needs sharper focus.

13. The MSME workstream shows promise in focusing on tax reform at a subnational level,

where political resistance and interference might be less than in central government bodies. It

has done useful work in publishing local government tax guides which, by alerting both taxpayers

and local government officials to the rights and obligations of taxpayers, can potentially reduce

illicit payment demands by corrupt officials. Effective tax reform, however, requires reform of

processes and procedures and training and capacity building for tax officials.


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6 Lessons and Recommendations

6.1 Lessons

The findings, conclusions, and recommendations of the MTE, though specific to Essor, may offer

some lessons for DFID with respect to future projects in the DRC, both BER and other kinds of

interventions, and to future BER projects in other challenging environments. The main broader

lessons are:

1. A failure to adequately and explicitly articulate a Theory of Change and then to use it to guide

and monitor implementation can be a fundamental flaw particularly in such challenging

circumstances, as are provided by attempting to bring about BER in DRC.

2. BER projects that focus on policy and legislative reforms alone are not responsive to the main

challenges businesses face in DRC, and are unlikely to produce any significant improvements in

the business environment. Legislation and regulations in DRC are far from perfect, but they are

not notably worse than in many other countries whose economies perform much better. Nor is

the capacity of public institutions in DRC markedly worse than in many other countries in sub-

Saharan Africa and elsewhere, which nevertheless perform better than DRC. This suggests that

it is of fundamental importance to understand the political and institutional context in which the

project is operating, and in particular to try to align the aims of the programme with political

incentives.

3. Work on BER in DRC faces significant challenges from a dysfunctional political system and high-

level, endemic corruption on a massive scale. Projects need to be designed in a way that is

adaptive to emerging opportunities and is rooted within a realistic appraisal of the political

economy.

6.2 Recommendations

For each recommendation we provide an indication of whether the recommendation is primarily

addressed to DFID DRC (DFID) or the Essor management team (Essor).

6.2.1 Overall Management of the Project

1. It is recommended that the project be given a period of four months (to end of April 2018) to

substantially improve the central management and agree the composition of its workstreams

on an informed basis. If project management has not adequately improved by this point,

then we recommend the programme be pared down to the workstreams that show progress

(OHADA and A2E with a refocused AC; see portfolio design below) with a much-reduced

central management function. Key criteria to evaluate management improvements should

include:

• A competent, full-time, resident, Francophone, BER specialist Team Leader in post, with

a functional SMT;

• Strategic coherence, complementarity, and relevance of the workstreams and their

interventions articulated; and

• Each workstream having produced an assessment of:


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o A plausible workstream theory of change, including assumptions;

o What is likely to have been delivered in terms of results by project closure;

o What resources are needed to achieve this goal; and

o Progress against clearly defined performance targets (Essor, DFID).

2. The workstreams need to have either resident French-speaking leads, or (if nonresident)

senior members of the team who can interface with the client and support them in decisions

related to the political economy. They need not be highly experienced technical experts:

except for A2E, few Essor interventions require highly developed technical expertise. Their

principal tasks should be to build relationships with and coordinate support to designated

counterparts and beneficiaries, often through relationships and in conjunction with other

donors. The workstream leads, subject to approval by the Team Leader, should have the

ability to bring in short-term technical specialists as needed, with a minimum of delay

(Essor).

3. Wherever possible DFID needs to give accountability for project management to PwC and

reduce its involvement with ongoing project management decisions to enable the project to

be more rapid, flexible and responsive to ongoing implementation needs. DFID can advise

and can also put in writing their suggestions but the accountability for implementation

decision making should be with the implementing partner (DFID).

4. The MRM system should be strengthened to more accurately reflect achievements and

results appropriate to a BER project. This could include developing more intervention-

specific impact indicators based on an exercise of clarifying the full range of expected

benefits for each workstream. It should also incorporate a review of what the best indicators

of progress towards such impact could be (Essor). The timing of the project's final evaluation

should be three to five years after project close-out, providing a more realistic time frame to

assess the true impacts of the project (DFID).

5. The project needs to implement its private sector engagement strategy, and engage in a

systematic way with the private sector to better identify issues and develop solutions.

Different techniques can be used:

a. Use of the planned regular MSME survey to gather feedback on issues and progress

on reform;

b. A light-touch stakeholder mapping for each intervention to identify key potential

champions and challengers for each reform. This can be used as the basis for

establishing public–private dialogues to work on each issue;

c. If there is time at this stage of the programme, working alongside BMOs (and

engaging other local stakeholders like think tanks and the media) to build their

capacity to represent MSMEs and specifically to prepare issues for dialogue, and

advocate and monitor reform; and

d. Implementation of the communications strategy to build support for the reform

process (Essor).

6. An improved VFM framework should be implemented. Key changes include defining the

qualitative analysis required, setting targets, breaking down the analysis to the workstream


ePact 23

level, and improving and integrating the impact modelling into the framework. Reporting

against the framework should focus on what the analysis implies for adapting the project

implementation strategy (Essor).

7. Essor should seek to place a long-term, resident expert within ANAPI to support the

organisation and help set strategic reform priorities, most likely by working with one or more

local staff to set and carry out a policy reform research agenda (Essor).

8. Essor should cooperate more closely with the ÉLAN project. DFID should develop an

approach to sharing attribution that incentivises collaboration between the projects (DFID).

6.2.2 Overall Project Portfolio Strategy

9. Given most workstreams' slow progress to date, and the complexity of BER in the DRC, the

project's remaining time frame is very short.15 To inform the project's strategic choices, DFID

should clarify whether it is willing to continue to engage in BER beyond 2019 (DFID). If DFID

does not indicate a willingness to continue supporting BER in DRC, Essor should plan its

project closure based on the expectation of no further engagement beyond the end of 2019.

The expected end-point of all workstreams ahead of that date needs to be clear, including

any required transition arrangements of activities to government or other donors. In such a

context, there seems limited merit for any further diagnostic or early-stage reform activities

(Essor).

10. Given the challenges the project has faced in trying to manage its activities in the highly

complex area of BER in the DRC, a practical approach at this stage would be to reduce the

range of activities being supported. This is relevant both within certain workstreams

themselves (anti-corruption, which has engaged in far more interventions and activities than

it has the management and technical capacity to support) as well as in reducing the breadth

of the Essor portfolio of interventions. An optimal portfolio at this stage of the project would

consist of a continuation of the OHADA and A2E workstreams as currently configured,

together with an anti-corruption workstream reduced to a much smaller set of interventions,

but with the possible incorporation of the MSME as a standalone intervention within the anti-

corruption workstream (Essor).

11. Were DFID to indicate a willingness to continue to support BER in the DRC beyond 2019

then the project could adopt an approach closer to the originally intended flexible facility

design. The sector performance reviews and case studies set out specific examples of

potential new departures for workstreams that might prove effective but would require a

longer period of support than could be achieved during what is left of the project's existing

time frame (Essor).

12. The decision has already been taken to shut down the AVC workstream. It is recommended

that the Essor AVC team be offered to ÉLAN to work on improving the business environment

for the coffee value chain and others, notably by reforming the rules, regulations and

procedures that ONC applies, and providing technical assistance and capacity building to

continue to help the ONC become an organisation that provides valuable services to actors

in coffee and other agriculture subsectors (ÉLAN).

15 Essor's contract end date is January 2020. To allow for sufficient reporting as well as the wind-down of relevant activities, this implies most workstreams will need to largely complete their activities by the end of Q3 2019.


ePact 24

13. The project should develop a systematic engagement strategy with the private sector, to

build the capacity to identify and advocate for reforms and to encourage transparency and

accountability (Essor).

14. To improve its gender focus, Essor should collect specific gender-focused data for all its

data collection and survey activities for 2018. This is not simply a question of disaggregating

samples and responses by sex. Specific questions need to be asked about the gender

outcomes and impacts for the workstreams under study. There is currently no mention of

gender in the survey descriptions. Careful attention then needs to be paid to considering

how this data practically informs the implementation of workstreams (Essor).

15. In general, interventions going forward should be moving away from the current heavy focus

on training and sensitisation, and towards more practical and facilitative actions with

concrete and measurable outputs (Essor).

16. Essor should use political economy analysis in a systematic way to guide its understanding

of partner and stakeholder relationships.

6.2.3 Recommendations by workstream16

17. Access to electricity: The A2E workstream should continue its activities with few changes.

Better performance indicators should be developed.

Essor's Senior Gender Specialist should ensure that access to the solar mini-grids is

inclusive; currently (as with AF2), the main target population seems to be medium and large

enterprises, which may indeed benefit women and poorer people, but not as a directly

targeted population. Access should be facilitated by reviewing and reducing current barriers.

18. OHADA: should be continued and expanded as resources permit (more detailed

recommendations are provided in the OHADA case study).

19. AC: future AC interventions should restrict themselves to Kinshasa and one other location.

Prioritise the focus on women and preventing sexual and other exploitation in the AC

workstream at Kasembelesa Crossing in Katanga. Additionally, in the context of AC,

strengthen WEE dimension via collaboration with La Pepinière, because greater WEE

reduces women's vulnerability to corruption.

20. AVC: DFID have decided to close the AVC workstream in Essor. It is proposed that the AVC

team be offered to ÉLAN to assist with the enabling environment for agriculture and agri-

business.

21. MSME: Given the degree of convergence between AC and MSME, a merger of the two

workstreams is proposed, with an expanded focus to include not only official payments but

unofficial ones as well.

22. A2F: There are two choices for Essor and DFID with respect to A2F:

16 See discussion in the MTE Technical Annexes, which underpin these recommendations.


ePact 25

i. maintain a reduced presence until ARCA and the Central Bank become more

receptive to Essor support in development of the regulatory framework for insurance

and focus on leasing activities in collaboration with ÉLAN; or

ii. seek other aspects of inclusive finance that it could support and in which it could

produce results within the two remaining years of project life; specifically, consider

interventions which address the needs of MSMEs, especially women-run ones. This

should include a focus on improving access to, and terms of, credit or debt for

business expansion (the current leasing and insurance interventions are less likely to

benefit smaller businesses).


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Annex A Excerpts from the MTE Inception report

A.1 Essor MTE design

4.1 Objectives and scope of the evaluation

Few specific issues were identified during Essor's annual review for inclusion in the MTE, reflecting

the limited implementation of the project at that stage. The priorities for the scope and objectives of

the MTE were informed more substantially by discussions with DFID and the service provider during

the inception process. The inception process and the issues prioritised are detailed in the section

describing the development of the evaluation questions.

The purpose of the mid-term evaluation is two-fold: 1) to satisfy DFID requirements for mid-term

evaluations of all its projects; and 2) to identify any constraints or risks to project results, and

recommend corrective actions. The specific evaluation objectives are to:

1. Determine whether Essor's theory of change supports adaptive project implementation that is likely to lead to sustainable changes in the business environment;

2. Assess whether Essor's organisational capacity and arrangements support effective performance within a complex implementation context;

3. Review how effectively interventions within workstreams are being implemented, and whether intended results are likely to be achieved;

4. Propose changes to implementation that will improve project performance and the likelihood of achieving results; and

5. Gauge the accuracy and utility of project performance measurement, as well as any evaluability constraints anticipated for the project's final evaluation, and recommend improvements to address issues identified.

4.2 Description of the Essor project

Essor is a £35 million, five-year project launched in May 2015 and managed by PwC. As part of its

£100 million Private Sector Development Programme, DFID intended Essor to be a Flexible Facility

which will, on an as needed basis, design and implement interventions on:

• Business environment reform (commencing with support to the Government of DRC for OHADA

implementation);

• Access to finance; and

• Anti-corruption.17

DFID's terms of reference for Essor called for this flexible facility, 'on an as-needed basis [to] design

and implement business environment, access to finance and anti-corruption interventions in order to

contribute to private sector development and poverty alleviation in DRC. This work will commence

with a programme of support to the Government of DRC for the implementation of OHADA law,

practices and institutions … [and] will contribute to outcome indicator 1 of the logframe for DFID

DRC's Private Sector Development Programme: to support DRC to reduce its distance to the frontier

of the World Bank Doing Business Indicators from 35 to 52.'18

17 DFID DRC TOR for Essor (2013) 18 Ibid.


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The first Essor Annual Review, conducted by the DSU in February 2017, gave the project a score of

B for 2016 (subsequently revised to an A by DFID), observing that 'Overall the project has

established a firm basis for action, but aside from the strong progress made on the OHADA project,

less has been achieved than we would have hoped for. The project has failed to meet any of its

logframe targets. This is in large part due to a failure to update the logframe to set more realistic

targets for the first full year of the programme.'19

This relative lack of progress has been attributed by DFID and the project team to events and

conditions outside the control of project management and staff, including: 'the changing and complex

political environment in which Essor has been operating – in particular issues with the signing of the

agreement with the Government of DRC and the dissolution of the Comité de Pilotage pour

l'Amélioration du Climat des Affaires et des Investissements (CPCAI), the body under the Minister

of Plan charged with coordinating and evaluating business environment reforms, and the

programme's key interlocutor.'20 DFID also reduced its spending on the DRC programme during FY

2015/16, and instructed Essor to 'go slowly' on the portfolio outside of the OHADA workstream.

The slow ramp-up of Essor activities also stems from the key operating principle of designing its

portfolio in partnership with government, which added an additional layer of approvals for the

selection of workstreams and interventions. The development of Essor's portfolio required detailed

scoping of potential workstreams and business cases for each proposed intervention, to inform

negotiations and meet the approval requirements of DFID and the DRC government.

4.3 Essor's theory of change

Essor's theory of change as articulated in April 2017 sees Essor support to government resulting in

businesses receiving better services from the government, which will result in improved incomes,

job creation and poverty reduction. More specifically, Essor's activities will be the following:

• Support Government to engage with private sector organisations through consultations and

public–private dialogue;

• Support Government to review, draft and adopt improved legislation to enact the priority reforms;

• Support Government to review, draft and adopt new operational frameworks to deliver better

services to businesses; and

• Build the capacity of Government to deliver services that are more transparent, cost-effective,

accessible and equitable and inform businesses that these services are available and how to

access them.

As a result of these activities, Essor believes the Government will:

• Identify and prioritise relevant reform for MSMEs;

• Improve the legislative framework for those reforms;

• Improve processes and operating frameworks to enact the legislation; and

• Improve its capacity to deliver the services and inform businesses of their availability.

This action by government will mean that businesses receive more cost-effective, accessible,

equitable and reliable services from Government which will remove obstacles to investors and

decrease costs. Essor envisages this happening through the following chain of actors and actions:

19 PSD Annual Review Summary Sheet, March 2017 20 ESSOR Annual Report, 2016


ePact 28

Figure 3 Essor vision

4.4 Rationale and key factors for success

Table 2 Investment climate obstacles and Essor workstreams

Investment climate obstacle

Workstream(s) Workstream objective

Corruption Anti-corruption Reduce resources lost to corruption through improved fiscal burden and anti-corruption reforms

Customs procedures and commercial regulations

Agricultural value chains reform Anti-corruption

Traders face a reduced trade burden and experience a more credible, transparent and equitable regulatory system

Access to electricity Access to electricity Businesses benefit from improved public procurement process and increased access to electricity

Access to finance Access to finance OHADA

Businesses can access financial services (credit, insurance, leasing, investor protection) that are more cost-effective, more equitable and more accessible

Taxes and fees MSME support Anti-corruption

Tax policies and regulatory frameworks are streamlined and operate with more transparency, equity, reliability and accessibility

Heavy administrative burden OHADA Construction permits Anti-corruption

Business registration services are more cost-effective, transparent, reliable and accessible

The rationale for intervention as described by Essor is a series of obstacles to investment which they

identified by conducting a survey21 of micro, small and medium-sized enterprises. Essor's work has

been structured around these obstacles; there is at least one workstream targeted at addressing

each obstacle, as shown in Table 6. Given that the overarching goal is reduction in poverty, we can

understand Essor's perception of the key underlying problem to address being that a poor business

environment impedes the recovery and growth of the private sector, which in turn restricts the

business opportunities for people and inhibits poor people's opportunities to improve their income.

Essor believes it will achieve success through these workstreams, by focusing on a small number of

reform objectives which will result in benefits for a large number of MSMEs and people. Essor aims

to work with government departments and agencies on 'demand-driven' policy, legal and regulatory

reform that focuses on targeted MSMEs, sectors and provinces. They will focus on reform of specific

policies, legislation and regulation that will have the highest impact, covering large populations.

21 A survey of 920 MSMEs in Kinshasa, Bandaka, Lubumbashi and Goma.

Policies improved to

enable priority

reform for businesses

Agencies and partners improve processes and procedures to enhance service to business

Agencies, BMOs and providers of services to businesses have capacity to raise awareness and deliver reforms to MSMEs

MSMEs and poor people realise the benefits of reform

Increase in cumulative net income for MSMEs and poor people


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Essor expects to be informed by public–private dialogue. They will develop products and promotional

materials with public and private intermediaries to raise awareness and disseminate reforms through

relevant public and private sector intermediaries that will engage target groups, who will benefit from

reforms.

Essor's key activities are identified as 'what needs to happen to effect change' in their Essor Vision

document of April 2017. This is replicated in Table 7 below.

Table 7 Essor activities critical to success

The change process What needs to happen to

effect change The impact

Government strategy/plan to address priority reforms that are relevant to MSMEs

Essor enables businesses to influence GoDRC policy/strategy at national level and in target cities and markets. Essor works with Government to develop a plan/ strategy

National and provincial Government understands business obstacles that are important to MSMEs in target markets/cities

Government improves legislative and regulatory framework to enable reduction of costs, obstacles and corruption, and improve business services to MSMEs

Essor supports Government reforms priority legislation and regulations resulting from PPD

X no of priority legislation and regulatory frameworks, at national level with focus on MSMEs specific markets and cities

Government has capacity to deliver reforms to MSMEs – removing obstacles and improving processes

Essor supports improvement in Government capacity to deliver reformed legislation and regulation to enhance delivery of services to MSMEs

X no services or simplified business processes that specially target MSMEs in X cities and markets are implemented

MSMEs in target markets/cities are aware of reforms and realise benefits from the changes

Essor works with intermediaries to raise MSMEs' awareness of reforms MSMEs learn how to work with reforms and Essor works with intermediaries to monitor business improvements

X no of businesses have increased rights/access to improved services, reduced number of corruption payments leading to reduced X cost and time in target sectors and cities, and the potential to impact X businesses at national level

4.5 Assumptions

Essor's Vision document of April 2017 is not explicit about the assumptions behind its theory of

change. Table 8 shows what they identify as activities critical to the achievement of impact.

Therefore, there is an implicit assumption that these activities will be carried out without impediment

in order to achieve impact, but there is no identification of specific barriers to these or any influences

outside of the project's control. Similarly, there was no identification of assumptions behind the logic

expressed in Figure 3.

In the most recent version of its logframe, Essor has identified key assumptions behind the

achievement of its outputs, outcomes and impact and these are presented in Table 8.


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Table 8 Logframe assumptions

Logframe target Assumptions

Impact: Reduced poverty through (enabling) improved incomes of poor women and men

Local and global security and macroeconomic conditions do not undermine stability and economic growth.

Inflation does not cause the DRC currency to depreciate such that the GBP-denominated benefits significantly diminish.

Savings on taxes and fees, cost of compliance and time spent on compliance is directly reflected as increase in profit and increase in income to business owners.

Intermediate impact: Business environment reforms (BERs) transform targeted sectors

An improved business environment

• Increases business activity and output.

• Stimulates business formation

• Encourages formalisation of businesses to allow access to financial products and investment

• Encourages investment

• Encourages improved risk management.

For the coffee sector it is assumed that the disincentives to trading legally are predominantly financial. It is further assumed that an increase in profit will drive an increase in demand from export agents, which in turn will raise prices to the producers. In this way a portion of savings in costs for export agents are passed on to producers.

For the electrification workstream, it is assumed that installed capacity is a proxy for energy consumption.

For the leasing and insurance interventions, it is assumed that enterprises will qualify financially to access leasing products, and that enterprises will demand insurance products as they become available.

For OHADA, it is assumed that enterprises will maintain their registrations under the new RCCM system.

Outcome: An improved business environment that fosters economic opportunities for poor people, with a particular focus on MSMEs and women

Viable commercial opportunities exist for private investors.

Resistance to reforms by those with vested interests in maintaining the status quo or reversing reforms can be mitigated.

Official procedural changes are enforced.

Increased earnings are passed on to MSMEs.

Factors outside of Essor's control do not overwhelm its contribution to business environment improvements.

Intermediate outcome: Stakeholders and institutions have capacity to identify and undertake BER

Government commitment to BER

Continuation of functioning MDAs and legitimacy of government actions is maintained

Awareness of issues is sufficient to stimulate reform actions

The work environment allows trained officials to apply their skills for reform actions

Changes adopted by institutions are maintained by successive managers and ministers.

Output 1: The GoDRC and private sector identify issues for reform and lobby for change

MDAs are open to receiving and incorporating dialogue from the private sector.

The private sector is willing to engage with the public sector and believes it is worthwhile.

Fear of reprisals do not limit sharing of critical inputs by MSMEs.

Quality information on the business environment is of value to stakeholders in promoting, planning and managing reforms


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Output 2: Development of human capacity in target GoDRC ministries, departments and agencies (MDAs) and private sector organisations enables Essor-targeted reforms

High rates of turnover at MDAs do not occur or, if they do, do not negate the benefits of capacity building for the target MDAs.

Officials have interest and find value in developing skills in areas relevant to Essor-supported reforms

Appropriate officials participate in training

Output 3: Essor interventions are implemented in partnership with GoDRC.

Buy-in to reform agenda can survive turnover in institutional leadership.

Key actions are politically feasible to achieve.

There is sufficient stability in Essor areas to allow interventions to proceed

Essor surveys can be undertaken without security risk to personnel

Essor interventions do not become politically sensitive

Output 4: Systems and procedures in place to give force to embed OHADA Law in DRC legal Framework and commercial practices

There continues to be political support for implementing OHADA within DRC

Capacity of partners is sufficient to contribute to the delivery of interventions.

Security risk remains low enough to permit access to DRC and targeted provinces.

Corruption and patronage networks do not undermine the programme or its workstreams.

Changes in personnel in government institutions are manageable such that that they do not have a negative impact on delivery.

Essor interventions do not become politically sensitive

Output 5: Business environment stakeholders have information that allows them to respond to reforms

Awareness of BER reforms is sufficient to incentivise behaviour change.

The main assumptions or questions that inform this TOC and which need to be tested are:

1. Whether a poor legal and regulatory environment (including policies, laws, and regulations and

their implementation and institutional setting) is indeed the binding constraint on micro, small and

medium enterprise development;

2. Whether target beneficiaries (including the poor, vulnerable and women) are able to take

advantage of opportunities created by successful business environment reform;

3. Whether the World Bank Doing Business (DB) indicators which have informed the design of the

Essor workstreams and objectives appropriately reflect the major constraints that businesses in

DRC face; and

4. Whether there is effective political commitment and capacity at different levels of government in

DRC to implement reforms to improve the business environment.

4.6 Scope of operations

Essor's seven workstreams are:

6. OHADA implementation;

7. Access to finance (A2F);

8. MSME taxation;


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9. Agricultural value chains;

10. Access to electricity (A2E);

11. Construction permits; and

12. Anti-corruption.

Essor is unusual in relation to normal international practice in that it is a business environment

improvement project that focuses less on national-level policies, laws and regulations (the OHADA

and Access to Finance workstreams are partial exceptions to this) and more on practical, localised

interventions likely to lead to bottom-up business environment reforms. This is illustrated in Table 9,

below, which shows the principal interventions in each workstream.

Table 9 Essor's workstreams and interventions

Workstream Current Interventions Main Counterparts/Partners

OHADA implementation Reinforce Commission Nationale

OHADA and its communications

training capacity

Ministry of Justice, Ministry of Finance,

Commission Nationale OHADA (CNO),

GUCE (one-stop shop for business

registration), Registry of Commerce and

Property Credit (RCCM); Tribunal de

Commerce in Kinshasa, Association des

Amis de l'OHADA

Re-engineer and digitise RCCM

registration system and establish

new GUCE/RCCM one-stop

registration centres in Kinshasa

and other provinces.

Establish Association des Amis

de l'OHADA as training provider

for CNO

Help Ministry of Finance and

Institut National de Sécurité

Sociale (INSS) to introduce a

simplified version of social

security and tax payment for

MSEs*

Access to finance Leasing enabling environment

(drafting a leasing law and

regulations, and associated

institutional development and

training)

Central Bank, Ministry of Finance, Micro-

finance institutions (MFIs), Savings

cooperatives; MSME business

associations; UN Capital Development

Fund, GIZ

Insurance enabling environment

(drafting a new insurance law and

regulations, and associated

institutional development and

training)

Central Bank, Ministry of Finance, ARCA

(insurance regulator), SONAS (national

insurance company)

MSME taxation Rationalisation/simplification of

fees and taxes paid by micro and

small enterprises and reducing

compliance burden

ANAPI

Support tax optimisation and

simplification in government, and

reducing barriers to formalisation

for MSEs

Support implementation of e-

payment system for taxes.


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Agricultural value chains Institutional reform of the Office

National du Café (ONC)

ONC; ASSECAF (Coffee exporters'

association)

Reform of trade practices and

fiscal regime for coffee production

and export

Direction Générale des Douanes

(Customs Service); Direction Générale

des Impôts (Tax Authority)

Access to electricity Solar power generation and mini-

grid distribution through PPPs

(includes site selection, regulatory

reform, institutional strengthening,

transaction advisory)

Ministry of Electricity and Hydraulics

(CATE – Energy Technical Support Unit,

CÉLANSER – Unit for Establishment of

National Agency for Rural Electrification)

COPIREP (Steering Committee for Public

Enterprise Reform)

Provincial authorities

World Bank, IFC, USAID

Construction permits

(currently suspended due

to conflict between

central and provincial

governments over

authority for building

permits)

• Implementing a one-stop shop for permitting process

• Introducing e-government application within the Department of Land Affairs

• Updating the Urban Planning law

Ministry of Urban Planning and Housing

• World Bank (pilot project with the Ministry for a one-stop shop in Kinshasa);

• Agence Française de Développement (Preparation of zoning maps)

Anti-corruption Identification and development of

a monitoring tool to track

recurring corruption payments

made by small traders, to identify

the mist burdensome practices

and design awareness

campaigns.

MSME associations, ACIDH and RCN

(human rights NGOs), ÉLAN, ANAPI,

DGDA (Customs Service), municipal and

provincial regulatory bodies, Governor's

office

Set up a public-private anti-

corruption platform in Haut-

Katanga

Mapping of potential AC entry

points throughout the Essor

programme

* Future intervention still in planning stage.

Though it is a flexible facility, it is unlikely that Essor will add to these workstreams, given the

complexity of relations with multiple Government counterparts at both national and provincial levels,

and the time it would take to gain their support for a proposed new workstream. Essor has, however,

suspended the Construction Permitting workstream due to conflicts between central and provincial

governments, and it is not certain when or if it will resume.

It should be possible to phase out existing interventions once they are completed (especially in the

case of pilot projects) and/or to add new ones within a given workstream. This could, for example,

occur within the agricultural value chains workstream, which is working with the Office National du

Café (ONC), restructuring the coffee export value chain. ONC claims authority over more than 20


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other agricultural commodities, so Essor could add one or more of these additional value chains to

its portfolio of interventions.

4.7 Evaluation approach and questions

4.7.1 Approach for developing the evaluation questions

The Annual Review of Essor's work in 2016, conducted by the DSU in February 2017, noted the

limited progress in implementation of Essor at that stage compared to what had originally been

planned. It highlighted the weakness of the monitoring and evaluation framework for Essor, including

the lack of 'a complete set of baseline data or fully developed methodologies for capturing indicator

data', significant weaknesses in the logframe and results framework (including in the treatment of

gender) and lack of information against which to assess value for money, given the 'lack of data on

performance at the effectiveness level'.22 The Annual Review also identified collaboration between

the two projects to 'promote greater synergies, joined-up thinking and strategies, greater value for

money, as well as enhanced visibility for the PSD programme and for DFID alike'23 as an imperative

for the future.

Taking these concerns as a starting point, the evaluation objectives and questions were discussed

during the MTE Inception Mission with DFID DRC. The MTE team also met Essor staff on multiple

occasions during the Inception Mission, familiarising itself with the technical aspects of the project,

its organisational processes and systems. Observations made during these meetings also informed

the identification of MTE priorities for Essor. The priority issues for the MTE were ultimately

articulated as:

• The validity and strength of the theory of change supporting Essor's conceptualisation as an adaptive project. Whether this has been adequately articulated to inform the design of Essor's portfolio of activities and to manage risks, especially the political risks associated with engaging the state as partner and beneficiary.

• The management and organisational capacity for effective implementation. The deployment of senior managerial and technical staff; as well as processes to manage risks in relationships with key stakeholders and to perform adaptively.

• Measurement of performance and impact. This covered the extent to which the logframe has been a useful management tool in particular for keeping track of intervention-level results; the need for comparative data credibly to measure the impact of the project on the business environment by project close, as well as the impact on the poor; and the relationships between the MRM system and the logframe.

The question of whether the timing is appropriate for an MTE of Essor has been raised by EQUALS

and by DFID's Results and Evaluation Manager, given the lack of monitoring information available.

It is the view of the DSU that the key evaluation questions for Essor do not revolve around the

availability of this information. The project is slightly beyond the half-way point in duration and the

priority issues need urgent resolution in order to accelerate the pace of implementation.

The DSU believe it is important to conduct the evaluation of Essor now as it will produce findings

which the project can feed into their planning for the subsequent years of implementation.

Furthermore, Essor staff have expressed a willingness to have the programme evaluated now, for

the same reason.

22 PSD Annual Review Summary Sheet, March 2017 23 Ibid.


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4.7.2 Evaluation questions

The MTE questions for Essor address the priority issues described in the preceding section. DFID

DRC's inputs were used to reformulate earlier drafts of the evaluation questions. The reformulated

questions were then disseminated for Essor's feedback. The evaluation questions are arranged in

four categories, as presented in Box 3 below.

Box 3: Essor evaluation questions


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Project Design

1. How appropriately is Essor designed sustainably to improve the business environment? [Relevance]

i. To what extent is Essor's design based on a valid theory of change?

a. Are the intervention logic and assumptions consistent with accepted theoretical frameworks?

b. Are the intervention logic and assumptions confirmed by evidence in the literature?

c. Are the intervention logic and assumptions consistent with evidence about the implementation context?

ii. Has prioritising government as a key partner and beneficiary compromised the ability of the project to achieve its objectives?

a. Have the risks associated with government as a key partner and beneficiary in the current political environment been anticipated and adequately mitigated in the project design?

b. To what extent does the Essor portfolio address the key constraints identified in the ex-ante diagnoses?

c. To what extent have the interests of the private sector, poor and women producers, been correctly identified and incorporated into intervention design?

iii. To what extent are the assumptions informing project design proving valid in practice?

iv. Is there a better alternative to Essor's approach that is viable in the DRC context?

v. To what extent are the assumptions informing project design proving valid in practice?

Management and Organisation [Efficiency]

2. Is Essor appropriately organised and managed to perform effectively? [Efficiency]

i. Does Essor have the capacity and organisational arrangements to implement an adaptive project?

ii. Does Essor have operational processes in place to ensure its portfolio is trimmed and/or expanded strategically over time to achieve its objectives?

iii. How are partner and stakeholder relationship management processes affecting project performance?

iv. How effectively is Essor coordinating with ÉLAN to enhance performance and achieve results? [joint EQ with ÉLAN]

v. Does Essor have the capacity and organisational arrangements to implement workstreams and their interventions?

Value for Money [Efficiency]

3. Is Essor likely to deliver value for money?

i. How appropriate is the Essor Value for Money framework?

ii. How effectively is the Essor Value for Money framework used to inform project management?

iii. To what extent is Essor on track to deliver value for money?

iv. How can the Essor Value for Money framework be strengthened?

v. How can the value for money that Essor delivers be enhanced?


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Progress Towards Results [Effectiveness]

4. To what extent is Essor likely to deliver an improved business environment?

i. To what extent are Essor workstreams and interventions effectively targeting the most relevant constraints? [Relevance]

ii. To what extent are the logic and assumptions linking interventions to intended results valid and being borne out in practice? [Relevance]

iii. To what extent are interventions within workstreams meeting implementation milestones and targets?

iv. To what extent are interventions already prompting changes in the business environment?

a. Are public sector actors acting to address business environment constraints because of Essor interventions?

b. Are new processes and procedures to address business environment constraints being implemented and enforced because of Essor interventions?

c. Are poor producers and women accessing opportunities that arise from an improved business environment?

v. Are there any unintended consequences resulting from Essor's interventions? [Impact]

Measurement and Reporting

5. Is Essor's measurement and reporting system appropriate to improve implementation? [Efficiency]

a) Does the logframe facilitate adaptive management of Essor?

a. Does the logframe allow for flexibility in adjusting implementation, closing-out or replacing interventions and workstreams?

b. Does the logframe function as a tool to signal which project adaptations are required and when?

b) To what extent does the logframe provide Essor with a framework for comprehensively tracking how workstream interventions contribute to project results?

c) To what extent does the MRM system contribute to learning and improving project performance?

a. Does the MRM system provide Essor with a management tool that supports the project as an adaptive facility?

b. Does the MRM system reflect intervention level performance and its contribution to project results?

6. How can Essor's impact on the business environment be measured in a final evaluation?

i. What form of evaluation design would be appropriate to assess Essor's results?

ii. How can evaluability constraints for the final evaluation best be overcome?

4.8 Essor evaluation approach

Given Essor's relatively slow pace of implementation, the critical issues for the MTE relate to

understanding the extent to which implementation has been constrained by features of its design (in

particular the need to engage with DRC government) and/or by management and organisational

issues. The main focus of the Essor MTE will therefore be on the analysis of the theory of change

and the Management and Organisation Assessment. The weakness of the MRM system poses

constraints for the assessing the performance of the project in terms of results achieved – however

this is not the main focus of the MTE for Essor. Instead, the project performance review and case

studies will focus principally on seeking to determine what factors explain the observed

implementation performance and how this performance can be improved.


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Essor verification – which will be run in parallel with the evaluation – will be less reliant on project

data than ÉLAN, mainly because there has so far been less activity and so less data is available.

Consequently, the Essor MTE will place greater emphasis on primary data collected from case

studies and from interviews with key non-government informants, such as professional associations

and other stakeholders who will have more independent views on Essor than those of Essor staff

and of partners receiving financing from the project.

4.9 Essor Theory of Change analysis

The theory of change analysis for Essor will focus principally on the following issues:

• The design and management requirements for a project to be effectively adaptive, and the extent to which Essor has met these requirements;

• The design and management requirements for a development intervention to strengthen the business environment in a highly challenging environment such as DRC, and in particular how to engage most effectively with government and the private sector, and how far Essor has met these requirements; and

• The plausibility of the intervention logic and key assumptions by which Essor's interventions may reach target beneficiaries (in particular poor producers and women).

The approach will therefore initially involve a review of the literature on these issues in order to

assess the ex-ante plausibility and appropriateness of the Essor approach. The Management and

Organisational Assessment and the Project Performance Review and the Case Studies will then

examine how far critical assumptions have held in practice.

The political economy context assessment will also be an important source of evidence for the

assessment of the validity of Essor's theory of change since it will focus on government interest in

and commitment to improving the environment for the private sector, and on the extent to which

positive intentions on the part of the central government translate into concrete improvements in the

business environment.

4.10 Essor management and organisational assessment

The Essor Management and Organisational Assessment will focus on the following issues:

• Management capacity to implement an adaptive project. This will involve comparison against best practice models from the literature through a review of documentation on Essor's management and staffing arrangements and KIIs with Essor staff and partners. A particular focus will be on examining how effectively key decisions have been made which have involved adaptation to the changing DRC context.

• Processes to ensure portfolio is appropriate to achieve project objectives. This will involve an examination of the key decisions that have been made about the portfolio structure, the evidence that has informed these decisions, and the results of the decisions taken. It will be based on a review of documentation and KIIs.

• Partner and stakeholder relationship management processes. The most important relationships are those with DRC government bodies (at both national and local level) and with the private sector (including private sector representative organisations). The assessment will examine the management processes and procedures for stakeholder engagement. It will include case studies of particular relationships and initiatives and how effectively Essor has strategically engaged to build commitment to common objectives with partners and to address differences in priorities or weaknesses in capacity of partner organisations. This will also be based on a review of documentation and KIIs, including with partner organisations and key stakeholders.


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• Coordination with ÉLAN. This aspect will examine the processes by which ÉLAN and Essor have sought to coordinate their activities. It will include discussions with both ÉLAN and Essor staff on what are seen as the key synergies between the programmes and how effectively information has been shared and how consideration of potential synergies has affected decision making.

4.11 Essor project performance review

The Essor project performance review will involve a review of data from the Essor MRM system on

the progress of workstream implementation and the results achieved to date.

Because of delays in the finalisation of the revised Essor logframe (approved by DFID on 29

September 2017) the Essor verification exercise is now expected to run concurrently with the MTE.

The MTE may encounter challenges in obtaining sufficient – and sufficiently reliable – data on which

to base the project performance review. These challenges are likely to stem from two main causes:

1. Weaknesses in the existing Essor MRM system; and

2. Possible flaws in the Essor project design and the validity of the theory of change, as

highlighted in Part 1 of the evaluation questions in Box 3, above; specifically:

a. To what extent is Essor's design based on a valid theory of change?

b. Has prioritising government as a key partner and beneficiary compromised the ability

of the project to achieve its objectives?

Except in specific, well-defined circumstances, the link between business environment reform and

measurable impacts is often indirect, and also subject to a considerable time lag between the

implementation of a given reform and the emergence of measurable impacts. These conditions are

not a reason to not undertake business environment reform, but they can pose significant challenges

for MRM.

The political economy of DRC also calls into question the reliance on government as a key partner

and beneficiary, though each workstream and intervention has non-government beneficiaries that

will serve as a principal object of evaluation. The PECA's findings will support the Essor MTE by

providing specific examples of how macro-level business environment reform does or does not

translate into improved conditions for MSMEs. The PECA will help to test the validity of the

centrepiece of Essor's theory of change – that legislative reforms by central government improve

conditions for MSMEs – and also whether reliance on government as a key partner and beneficiary

is justified in the current political environment.

The verification exercise will identify the most useful sources of information available and contribute

to an understanding of its strengths and weaknesses. The MTE will then seek to ascertain whether

gaps in data mainly reflect the challenges inherent in measuring the effects of business environment

reforms or rather result from flaws in the project design and theory of change.

There is likely to be adequate information available to assess progress in implementation (delivery

of outputs), but, given the indirect links and time lags between implementation and impacts, it is likely

to be more difficult to assess achievement of higher level results.

As a contingency plan we will explore the extent to which future impacts may be modelled in the

absence of actual impact data. This may prove especially effective in the A2E workstream, where a


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range of probable effects of solar mini-grids on MSME growth and household livelihoods can be

calculated.

4.12 Essor intervention case studies

The approach proposed for the Essor case studies differs significantly from that proposed for the

ÉLAN interventions, reflecting both the limited progress in Essor implementation, and the much

smaller number of Essor workstreams compared to the number of ÉLAN pilot projects, as well as

the generally greater geographical concentration of Essor interventions. The intention will be to carry

out some data collection related to each of the Essor workstreams with a view to understanding the

factors that have influenced the extent of progress achieved. This will focus principally on interviews

with key project partners and a review of documentation. The case studies will, however, also include

focus group discussions with intended beneficiaries. The selection of case studies will consider the

expected magnitude of impact of the selected workstreams, and the extent to which expected

impacts are both direct and measurable (e.g., changes in compliance procedures that produce

measurable improvements in the time or cost of compliance with regulations, as opposed to the

possible eventual effects of a new law or regulation). Case study selection will also consider the

existence of non-government beneficiary organisations in the catchment areas for Essor

interventions, which can be mobilised for focus group discussions.

The data will be disaggregated by age, disability, geography and gender, and the interviews and

focus group discussions will include women-only groups (which will be conducted, where possible,

with the direction or participation of a woman interviewer or moderator). Our reporting will separately

identify responses from women and will assess the different impacts of Essor interventions on

women and men.

An initial assessment of the status of the interventions in relation to the rationale for selection and

the form that case studies will take is the following:

• Preliminary estimates by Essor of projected NAIC suggests that the bulk of impact (approximately 95% of the total) is expected to come from A2E, anti-corruption, and OHADA (though no estimate has yet been made for A2F).

• Both MSME and Construction Permits have made limited progress. It is understood that the reasons for the lack of progress with Construction Permits are well documented. Some interviews to understand the constraints will be carried out but not detailed case studies.

• A2E has also been Kinshasa-focused, with the main activity being supporting government towards the launch of a fund for A2E grants (however none are yet disbursed).

• OHADA is the workstream that appears to have made the greatest progress in implementation, operating in both Kinshasa and Lubumbashi.

• Anti-Corruption has implemented some 'rapid impact' activities in North Kivu and Katanga.

• A2F has been focused in Kinshasa. An important activity where progress has been made is the support towards the privatisation of the insurance sector which has the potential for bringing about a significant change in the functioning of insurance markets in DRC.

• The Agricultural Value Chains workstream has been focused on coffee in North Kivu. The projected impact is, however, understood to be small.

It is therefore provisionally suggested that the case study approach may involve the following:

• Case study of OHADA, potentially including a visit to Lubumbashi. This will be focused on understanding the factors that have influenced the relative success achieved, and the likely sustainability and impact of the initiative;


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• Review of the other Kinshasa-based initiatives to understand the factors that have influenced the different levels of progress achieved, based on document reviews and KIIs, including with the main partners; and

• A case study of selected anti-corruption rapid impact activities. This may potentially be more similar in structure to the ÉLAN case studies and include some data collection from intended beneficiaries. It is proposed to include a case study, including using focus group discussions to obtain diverse views from end beneficiaries, in Goma.

The case study selection and approach will be finalised during the MTE Preparation Phase.

4.13 Essor value for money assessment

The starting point for the Essor VFM assessment (to be carried out in line with the methodology

described in Section 2.5.5) will be the current VFM framework. This is set out in Table 10 below.

Table 10 Essor Value for Money framework indicators

Economy

Category 1

• Average daily fees of personnel (national, international);

• Average daily expenses of personnel (national, international);

• Expenses as a percentage of total personnel costs;

• Programme Management costs as a percentage of total project costs. Category 2:

• No-cost value added services (number of days of services at no cost to DFID);

• Direct savings (fees and expenses reduced from what would ordinarily have been incurred);

• Cost-sharing with other DFID or donor workstreams (savings achieved through joint procurement of assets, shared services or joint activities).

Efficiency

• Cost per registered business on RCCM (Output 1);

• Cost per policy, law or regulation reviewed, drafted or adopted with a demonstrable contribution from Essor (Outputs 1 and 2);

• Cost per process or procedure reviewed, drafted or adopted with a demonstrable contribution from Essor (Output 3);

• Cost per person benefiting from capacity building (Output 4);

• Cost per person amongst target audiences reached through communication activities (Output 5).

• Proportion of processes, procedures, policies, laws or regulations that have been adopted after support to review or drafting;

• Total estimated savings in time and cost to businesses for selected processes relative to workstream costs.

Effectiveness

• Proportion of processes, procedures, policies, laws or regulations adopted with a demonstrable contribution from Essor that are actually properly implemented in practice;

• Proportion of people supported with capacity building that have applied this knowledge in practice;

• Proportion of increased business confidence attributable to Essor communications activities;

• Reported average decrease in business costs resulting from business environment reform;

• Spend by government or private sector into supporting project interventions relative to project's own spend.


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Cost-effectiveness

• Cost per pound of increased net attributable income change.

Equity

• Proportion of women participating in meetings, trainings and workshops;

• Proportion of women on stakeholder panel;

• Number of significant policies, laws and regulations discriminating against women, that have been reviewed, drafted or adopted with a demonstrable contribution from Essor;

• Proportion of MSMEs that report an increase in business confidence/decrease in business environment obstacles / decrease in business costs which are low-income or female.

• Proportion of new business registrations that are low-income or female.


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A.2 Essor Evaluation Matrix

Evidence Sources Research Activities

Judgement Criteria and Indicators

Evaluability Issues

Project Design

1. How appropriately is Essor designed sustainably to improve the business environment? 1.i To what extent is Essor's design based on a valid Theory of Change?

• Literature review on business environment strengthening theoretical frameworks

• Literature review on 'what works' in interventions to improve the business environment

• DSU articulation of EssorTOC

• Essor's current version of TOC

• Essor intervention concept notes, ex-ante diagnoses and results chains

• Key informant interviews with Essor staff

• Results information from Verification Exercise

• Analysis of Case Study findings

• Literature review and primary data collection on political and institutional context in DRC

• Theory of

Change

Analysis

• Project

Performance

Review

• Case Studies

• Political

Economy

Context

Assessment

• The intervention

logic is consistent

with accepted

theoretical

frameworks OR

innovations are

justified plausibly by

ex-ante diagnoses of

DRC context

• Assumptions

explicitly justified

against available

evidence (ex-ante)

• Assumptions

consistent with

findings from

literature (ex-ante)

Limited by the fact that the TOC was not developed ex-ante, and current version has not yet been finalised by service provider. Evidence may be insufficient to assess how far either intervention logic is holding, or (ex-post) validity of key assumptions. Delay in Essor Verification Exercise means that there will not be a comprehensive assessment of the quality of results information available Case studies will only cover a small number of interventions which may not be representative of conditions in all interventions.

1.ii Has prioritising government as a key partner and beneficiary compromised the ability of the project to achieve its objectives? • DSU articulation of Essor

TOC

• Essor's current version of TOC

• Essor workstream and intervention concept notes

• KIIs with DRC government and other stakeholders

• KIIs with Essor staff

• Analysis of case studies

• Theory of Change Analysis

• Project Performance Review

• Case studies

• Extent of contribution of role of government to explaining Essor performance

• Validity of key Theory of Change assumptions related to role of government

• Identification of alternative plausible approaches not based on depending on government


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Evaluability Issues

1.iii To what extent are the assumptions informing project design proving valid in practice?

• Secondary data on results achievement from Essor's MRM system

• Key informant interviews with partners for workstream interventions

• Fieldwork observations

• Findings from Political Economy Context Assessment (evidence from literature and interviews)

• Project performance review

• Case studies

• Political Economy Context Assessment

Assumptions holding during implementation Intervention logic is holding (i.e. outputs leading to outcomes/impact)

Potentially limited by quality of data in the MRM system. There may be insufficient fieldwork data to reliably test all the assumptions informing project design.

Evidence Sources Research Activities & Analysis

Judgement Criteria Evaluability Issues


2. Is Essor appropriately organised and managed to perform effectively? 2.i Does Essor have the capacity and organisational arrangements to implement an adaptive project?

• Documentation on Essor's management staff and capacity

• Documentation on Essor's management arrangements and management specific standard operating procedures

• Analysis of explanation of performance of different workstreams, focusing on how project has responded to changes in context

• Key informant interviews with Essor staff – perspectives on whether project management capacity and experience allows for efficient adaptive management; preserves strategic value of portfolio

Theory of Change Analysis Management and Organisational Assessment Project Performance Review Case Studies

• Definition of requirements for adaptive project management to be defined in Management and Organisational Assessment

• Findings from analysis of how Essor has responded to changes in context

• Management staff capacity and availability, project leadership, and SOPs consistent with requirements for efficient adaptive management

2.ii Does Essor have operational processes in place to ensure its portfolio is trimmed and/or expanded strategically over time to achieve its objectives? • Essor's standard

operating procedures for project proposals, approvals and designs

Theory of Change Analysis

• Portfolio decisions clearly and explicitly justified


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• Analysis of portfolio decisions

• Key informant interviews with Essor staff – perspectives on whether operational processes allow for an adaptive approach to intervention approval and close-out process; whether an adaptive approach allows for constituting a portfolio with long-term strategic value

Management and Organisational Assessment Project Performance Review Case Studies

• Justifications of decisions consistent with available evidence and intervention logic in relation to facilitating achievement of results

2.iii How are partner and stakeholder relationship management processes affecting project performance?

• Key informant interviews with stakeholders

• Essor's standard operating procedures for managing relationships with other stakeholders

• Essor reporting on stakeholder engagement

• Case study and Project Performance Review analysis of role of stakeholder relationships in explaining performance

Management and Organisation Assessment

Project Performance Review

Case Studies

• Evidence on the extent to which stakeholder relationships explain project performance

• Satisfaction of stakeholders (particularly DRC government, other development partners, private sector) with Essor engagement and performance

• Evidence of understanding of, and commitment to, Essor programme from stakeholders

• Essor has coherent stakeholder engagement strategy that is being effectively implemented.

2.iv How effectively is Essor coordinating with ÉLAN to enhance performance and achieve results? [ÉLAN EQ 5.v]

• Key informant interviews with ÉLAN and Essor staff – perspectives on and examples of communication, coordination/collaboration between programme components

• Theory of Change documentation

Theory of Change Analysis [ÉLAN, Essor, PSD]

Project Performance Review [ÉLAN, Essor]

Management and Organisation Assessment

• Coherence and validity of PSD, ÉLAN and Essor Theories of Change demonstrating effective synergies between projects

• Examples of how improvements in

None anticipated


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• Documentation on interactions between projects

Case Studies business environment have facilitated strengthening of market system

• Examples of benefits for each project resulting from coordination efforts between projects

2.v Does Essor have the capacity and organisational arrangements to implement workstreams and their interventions?

• Documentation on Essor's technical staff and capacity

• Key informant interviews with Essor staff – perspectives on adequacy of staffing in relation to implementation demands

• Workstream planning documentation

Theory of Change Analysis Management and Organisational Assessment Project Performance Review Case Studies

• Definition of requirements for technical capacity to implement workstreams to be defined in Management and Organisational Assessment


• Management staff capacity and availability, project leadership, and SOPs consistent with requirements for efficient adaptive management

• Evidence on the extent to which technical capacity explains workstream and intervention performance


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Evaluability Issues

Value for Money

3. Is Essor likely to deliver value for money? 3.i How appropriate is the Essor VFM framework?

• Essor's VFM framework and related documentation

• Key informant interviews

VFM Analysis:

• Criteria-based review of VFM framework and related documentation

• Content analysis of key informant interviews

• VFM framework complies with appropriateness and utility criteria of review protocol

• Key informant interview data consistently confirms the appropriateness and utility of the VFM framework

None anticipated

3.ii How effectively is the Essor VFM framework used to inform project management?

• Essor's VFM framework and related documentation

• Essor's standard operating procedures


VFM Analysis:

• Criteria-based review of VFM framework, related documentation and SOPs

• Content analysis of key informant interviews

• Examples of decisions

• Procedures to include VFM results integrated into project management, and consistently utilised implemented

• Key informant interview data consistently confirms that VFM results are utilised in project management

None anticipated

3.iii To what extent is Essor on track to deliver value for money?

• Essor's expenditure data


VFM Analysis:

• Cost per results achieved (valid units to be determined, in accordance with VFM guidelines)

• Costs incurred justified by magnitude of results achieved

• Performance against VFM targets for selected indicators

Potentially limited by quality of data in the MRM system, and the extent to which expenditure data is captured at sufficiently granular level, and by extent to which current VFM framework is judged to be appropriate.


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Evaluability Issues

Progress Towards Results

4. To what extent is Essor likely to deliver an improved business environment? 4.i To what extent are Essor workstreams and interventions effectively targeting the most relevant constraints?

• Data on results achievement from Essor's MRM system

• Key informant interviews with private sector representatives and government stakeholders



• Case studies

• Evidence of improvements in business environment associated with Essor interventions

• Evidence that targeted improvements in business environment are of priority concern to private sector and government and that have potential for significant and widespread impact on poverty

Potentially limited by availability of data and analysis on business environment in the DRC, and quality of MRM data (particularly in the absence of an agreed logframe).

4.ii To what extent are the logic and assumptions linking interventions to intended results valid and being borne out in practice?



• Findings from Political Economy Context Assessment (evidence from literature and interviews)



• Case studies

• Political Economy Context Assessment

• Intervention logic holding: i.e. delivery of planned activities is leading to intended results

• Specific assumptions supported by evidence from implementation process

Potentially limited by quality of data in the MRM system. There will be insufficient fieldwork data from case studies to test all the assumptions informing project design.

4.iii To what extent are interventions within workstreams meeting implementation milestones and targets • Comparison of

targets with performance


• Proportion of targets met

Lack of finalised and agreed logframe constrains results reporting and means targets may not be well-defined

4.iv To what extent are interventions already prompting changes in the business environment?

• Results achieved by Essor

• Sources of measures of features of the



• Case Studies

• Evidence of changes in appropriately selected indicators

Does not appear that baseline indicators of business environment were defined or are being tracked


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Evaluability Issues

business environment over time (e.g. World Bank)

for business environment

• Evidence of plausible contribution to any observed changes of Essor activities

MTE will examine scope for constructing such measures

4.v Are there any unintended consequences resulting from Essor's interventions?

• Key informant interviews with private sector representatives and government stakeholders

• Findings from case studies

• Case studies

• Project performance review

• Examples of consequences not anticipated in design documentation identified

MRM system may not be effectively identifying unintended consequences Potentially limited by absence of corroborating data to substantiate respondent observations. Examples likely to be limited to any associated with case studies



Evaluability Issues

Measurement and Reporting

5. Is Essor's measurement and reporting system appropriate to improve implementation? 5.i To what extent does the logframe facilitate adaptive management of Essor?

Essor logframe Evidence on results achieved KIIs with DFID and Essor management

Management and Organisational Assessment Project Performance Review

• Definition of requirements for adaptive project management to be defined in Management and Organisational Assessment

• Findings from analysis of how Essor has responded to changes in context and role of logframe in constraining/ facilitating response

5.ii To what extent does the logframe provide Essor with a framework for comprehensively tracking how workstream interventions contribute to project results?

• MRM system design and contents

• Essor logframe

Management and Organisational Assessment (including MRM system review)



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Evaluability Issues

• Evidence on results achieved

• KIIs with DFID and Essor management


and role of logframe in constraining/ facilitating response

5.iii To what extent does the Essor MRM system contribute to learning and improving project performance?

• MRM system design and contents

• Essor logframe

• Evidence on results achieved

• KIIs with DFID and Essor management

Management and Organisational Assessment Project Performance Review

• Examples of how information from the Essor MRM system has been used to identify lessons that have been used to improve project performance


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Annex B Review of Research Methodology

B.1 Research activities for the MTE

B.1.1 BER literature review

The literature review carried out for Essor sought to examine the evidence, both international and

from DRC, for the links between business environment reform initiatives and economic performance,

MSME creation and growth and poverty reduction. A single review was conducted for the ÉLAN and

Essor projects, and although the research and findings pertinent to each project were presented

separately, there was, naturally, some overlap, given the connections between BER and M4P and

the common goals and intended beneficiaries of the two projects.

With respect to Essor, the literature review sought to answer the following three questions:

• What is the evidence that business environment strengthening can reduce poverty and reach the poor and vulnerable in very poor, conflict-affected areas with weak institutions such as DRC? To what extent (and how) can the binding constraints to economic activity that perpetuate poverty in contexts like DRC be addressed by business environment reforms?

• What does evidence from DRC suggest about the extent to which targeted beneficiaries of the PSD programme (including poor people and women) have access to the incentives, resources and skills to benefit from opportunities created by business environment strengthening (both as producers and consumers)? How does this vary in relation to gender, age, ethnicity, location and other factors?

• To what extent do the World Bank Doing Business Indicators adequately reflect the main constraints businesses face in developing countries such as DRC, and to what extent do they provide an adequate framework for measuring progress?

The review obtained documentation from a wide range of databases, journals and websites, together

with information from other sources, which included programme team leads and other individuals

intimately familiar with the BER literature. Documentation was also found by following up on links

and reference lists in the identified literature searching for material outside the orthodox peer review

channels. The review searched 12 academic databases – including the British Library for

Development Studies (BLDS); C2 SPECTR; Cambridge journals online; ChildData; EconLit; ERIC;

Sage full-text collections; ScienceDirect; Social sciences citation index (SSCI); Social sciences

database; Social Science Research Network (SSRN); and Web of Science – and eight institutional

websites. Published or unpublished studies were also identified by 'snowballing'. Finally, general

purpose search engines, such as Google and Google Scholar, were used to identify studies located

outside the standard peer review channels (e.g., policy documents and briefings, donor reports,

concept notes, working papers, etc.). These efforts resulted in the identification of 490 documents.

These documents were further screened for relevance, quality of research, robustness of conceptual

framework, rigour of analysis, and consistency of evidence. This screening yielded 135 documents

judged appropriate for the review.

B.1.2 The Political Economy Context Analysis (PECA)

The purpose of the Political Economy Context Assessment (PECA) was to examine the main political

and institutional factors in DRC that were relevant to understanding progress in implementation and

the achievement of results of the PSD programme and the ÉLAN and Essor projects through which

it is principally being implemented. The PECA was based on a review of literature (academic studies

and analyses as well as documents and reports from national and international organisations), which


ePact 52

address the key issues relevant for testing the PSD programme and ÉLAN and Essor projects' theory

of change assumptions. The key topics researched were governance at national and local level,

state–society relations, rule of law and corruption, business environment, livelihoods, poverty, and

social capital. The review was mainly based on analyses published by international institutions

(AfDB, UNDP, IMF and World Bank), international NGOs (ICG, Mo Ibrahim Foundation), and

internationally recognised experts and academics, as well as on legislation and regulations adopted

by the Congolese State. The analysis focused on documents published after 2010, emphasising

more recent studies completed in the last two or three years.

B.1.3 Sector performance reviews

Sector performance reviews were completed for each of Essor's six sectors of operation; three sector

performance reviews are separate documents, and the remaining three are included in more detailed

case studies (all six are presented in the Technical Annex). The sector performance reviews

complemented the ToC assessment, examining in more detail the content of each sector's

intervention portfolio, exploring the main achievements in bringing about business environment

reforms, and exploring the relationships between the targeted business environment reforms and

the expected impacts. Normally, sector performance reviews would assess evidence on what the

various sectoral interventions have achieved; however, given the very recent adoption of the Essor

MRM and the very early stage of implementation of most interventions, this evidence has been

largely unavailable. Consequently, these reviews have focused on the relevance of the logic and

validity of the key assumptions underpinning their results chain, and the extent to which they are

likely to deliver poverty reduction through business environment reform.

B.1.4 Intervention case studies

Based on information contained in the early sector reviews and discussions with Essor's

management in Kinshasa, specific interventions were identified to serve as the focus of detailed case

studies. Together with the theory of change assessment and the performance reviews, these case

studies form the basis on which to test the validity of Essor's implementation model. Although Essor

is currently active in six sectors, the relative lack of progress in implementation of several of them

made it difficult to carry out a case study in each one.

Three case studies were selected, based on their maturity (mainly, length of time since inception

and progress from the diagnostic to the implementation phase) and their expected impact. It is

important to note that probable or potential impact was gauged less in terms of aggregate NAIC and

more in terms of overall effects on economic performance, such as direct investment flows. Potential

impact was also assessed on the basis of the demonstrated commitment by key public and private

sector partners and the complementarity of the specific interventions with other donor initiatives.

Selection criteria also included the relevance of the case studies to the MTE's aim of testing key

assumptions underpinning the theory of change.

Based on these selection criteria, the OHADA, Anti-corruption (AC) and Access to Electricity (A2E)

workstreams were selected as the objects of case studies. The application of the selection criteria

to these workstreams (and to workstreams not selected) is discussed in greater detail in the

Technical Annex.

B.1.5 Key Informant Interviews

The Essor MTE evaluation team conducted interviews with private and public-sector beneficiary and

partner organisations involved in each of the workstreams. The sector lead also interviewed the

senior Essor staff and key staff members of each of the Essor workstreams – in most cases both


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during the inception mission in June and the evaluation mission in October – as well as with the

Essor senior project management team.

B.1.6 Results verification exercise

The results verification was carried out independently by the DSU. It assessed all Essor

interventions, including the quality of results reporting and an assessment of the validity of modelled

estimates of impact. A draft of the Essor verification report was submitted to DFID on 1 December

and approved on 11 December 2017.

Normally, the sector performance reviews would draw extensively on the findings of the results

verification. However, the Essor MRM was not approved until late November 2017 with a full set of

data not available until extremely late in the evaluation process. Consequently, the MTE has relied

mainly on empirical data from the performance reviews and case studies, as well as the literature

review and supplemental desk research, to evaluate the validity of the theory of change assumptions

and the likelihood that each workstream will produce the expected results.

B.1.7 Essor management and organisation review

The management and organisational assessment of Essor was based on discussions with DFID

DRC and with Essor senior management, technical leads, and key public and private sector

counterparts. The main issues, which are reflected in the evaluation questions, include:

• The extent to which Essor operates as an adaptive, flexible facility and the reasons for any failure to follow this model;

• The effectiveness of operational processes for approving pilot partnerships, managing relationships critical to implementation (with pilot partners and regional office staff) and mobilising support from stakeholders;

• The quality and effectiveness of coordination between Essor and ÉLAN; and

• The extent to which the overall project reporting system has provided an appropriate measurement incentive framework for the project.

B.1.8 Essor's measurement and results management (MRM) framework

As discussed above, Essor's MRM system only became operational after the MTE analysis was

largely completed, making it difficult to assess the degree to which it will provide useful and

actionable information. Instead, this section will evaluate the utility of the Essor logframe and the

performance indicators in Essor's annual and quarterly reports. One important evaluation question

that this section will seek to answer is whether Essor or any other BER project can be evaluated in

terms of net attributable income change (NAIC), and MSME performance.

B.1.9 Review of Essor's VFM framework

The VFM assessment reviewed the Essor VFM framework. This was complemented by interviews

with the Essor project team, and a further document review to assess the extent to which the

framework influenced management decisions as well as allowing for a broader assessment of the

project's VFM performance. The findings from the other parts of the MTE, particularly the sector

performance reviews and case studies, provided the final key contribution to answering the VFM

EQs, particularly regarding the overall cost-effectiveness of Essor, which is ultimately determined by

the likelihood of it achieving a sustained impact.


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B.2 Observations on MTE Process

B.2.1 Independence of evaluation

The evaluation has been carried out by the DSU, which is managed by OPM, a member and co-lead

of the ePact Consortium. ePact is a consortium of organisations specialising in evaluations, which is

managed by OPM and co-managed by Itad. ePact is a supplier on DFID's Global Evaluation

Framework Agreement (GEFA) under which the DSU project was procured. Other than at the

procurement stage, ePact has not been involved in the DSU management and implementation; OPM

is a sole DSU contract holder.

The DSU proposed establishing an Independent Evaluation Group, which would oversee the

implementation of the evaluation, as well as review and sign off on the final outputs. However, the

Group was not set up in time for the MTE. The evaluation methodology followed the approach which

was approved by DFID and DFID's independent evaluation advisers. The evaluation team received

full cooperation from all stakeholders and did not encounter any interference with its work.

In the DSU, the evaluation has been overseen by Stephen Jones, DSU Mid-Term Evaluation

Director, who is an evaluation specialist and Principal Consultant in OPM. His role has been to

ensure that the evaluation methodology and methods are robust, and the evaluation process is

implemented thoroughly. Evaluation of each PSD Programme Component has been led by an

independent evaluator who is not an OPM staff member or permanent member of the DSU. Charles

Krakoff has been leading on the Essor evaluation, Paul Zille on the ÉLAN evaluation, and Terence

Beney on the overall PSD evaluation. As none of the lead evaluators have had any prior involvement

in the PSD programme, there have been no actual or perceived conflicts of interest.

The DSU is a project component of the PSD programme. Therefore, to reduce any potential conflict

of interest the evaluation of the overall PSD programme (which included the DSU assessment)

included further safeguards. In addition to contracting an independent lead evaluator, the evaluation

process distinguished the DSU assessment, which was carried out independently, with no oversight

or view of the DSU and OPM. It was only shared with the DSU after submitting a final draft to DFID.

B.2.2 Evaluation uses and target audience

The primary target audience for the mid-term evaluation report is DFID DRC, as the contractor of

this deliverable. The evaluation report serves an accountability purpose, but also provides evidence-

based recommendations for corrective actions that address any constraints or risks to project results,

in alignment with the overarching purpose of the exercise. As such, the report contributes to DFID's

service provider and programme oversight. Lessons on the successes and failures of the project

components will therefore inform strategic and funding decisions, for the current and successive

private sector development interventions.

The report's secondary audiences are the two project components, ÉLAN and Essor. The service

providers' perspectives on the utility of the evaluation process for their projects were considered

when the evaluation was designed, and it is anticipated that the report will thus be of value for

learning. This aligns with the overarching purpose of the MTE – to make recommendations for

corrective actions to improve project results. Importantly, the use of the MTE for service providers is

enhanced by the function of the DSU within the PSD programme. The evaluation report will not just

be disseminated to service providers, but the DSU, under workstream 3 activities, will actively

engage with them on the findings, and provide technical support to facilitate learning, and course

corrections, if and as necessary.


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Additional audiences that may benefit from the evaluation findings include service provider private

sector partners and government counterparts, other donors and service providers implementing

private sector development initiatives, and the development community more broadly. While the MTE

is not executed expressly for these additional audiences, they are considered in the reporting and

dissemination plan.

The DSU was responsible for producing a report of the evaluation activities and findings. This was

shared in draft form in December 2017 with DFID DRC and the Evaluation Advisers and the relevant

projects to seek feedback. The DSU received a full EQUALS report and grading (74% for ÉLAN and

71% for Essor and PSD), plus separate comments from DFID for all three reports, plus some 30

pages of written feedback from each of the two projects. This written feedback was augmented with

face-to-face discussions with DFID, ÉLAN and Essor in February 2018. This Final Report has given

due consideration to all the comments received and the final version, which will then be submitted

for EQUALS review. The final version will be a public document.

The DSU's Learning and Adaptation Support Workstream will then engage with service providers,

and deploy an augmented dissemination and communication strategy, to enhance evaluation utility,

and meet its three objectives:

• To share DSU findings, recommendations and lessons learned with DFID DRC, ÉLAN and Essor in an easily digestible, useful way;

• To provide technical assistance to support the projects' implementation of recommendations; and

• To help the DSU deliver its objectives and reflect on lessons learned to ensure continual performance improvements.

B.2.3 Internal dissemination

To accomplish this the DSU will implement three activities committed to in its Inception Report,

namely:

1. Establish the PSD Learning and Communications Working Group. The working group –

consisting of the DSU Learning and Communications Lead, DSU Communications Manager

and ÉLAN and Essor communications staff – will use the MTE as the means to consolidate

intended procedures for a 'harmonised approach to communications and stakeholder

engagement'. This includes instituting regular meetings to discuss learning and opportunities

for collaboration. The evaluation will have made findings regarding inter-project collaboration

to improve performance and achieve results, which will provide material for discussions.

2. Facilitate the Learning and Adaptation Workshops. The first L&A workshop is scheduled

for September 2018. By this point the DSU will have generated a body of analysis and

recommendations following completion of the 2018 Annual Reviews, the MTE (including

verification and TOC testing) and some bespoke advisory inputs for the projects and DFID

DRC.

3. Provide technical assistance to support the implementation of recommendations. As

stipulated in the DSU Inception Report, this is a demand-led activity, and will depend on the

service providers indicating their need for such support. In terms of the MTE, this support

would initially entail a structured interaction with the service provider, which will include the

preparation of a plan to respond to the recommendations and make implementation changes

if required.


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B.2.4 External dissemination

The DSU has a mandate to collate lessons learned and some best practice examples for wider

dissemination. 'This learning function will serve both DFID (DRC and more widely) as well as the

broader development community working in the field of economic development.'24 In terms of the

MTE, this mandate will be implemented in collaboration with the service providers and DFID. The

DSU will facilitate a process by which the parties together:

• Identify the immediate stakeholders amongst their private sector partners and government counterparts that would take an interest in selected findings from the MTE;

• Propose evaluation products best suited to these audiences, for development and dissemination; and

• Identify existing platforms, or propose a tailored platform or event, at which the DSU could communicate the relevant findings to the identified audiences.

This will include dissemination in French as well as English.

Finally, the DSU will prepare an information product based on findings it judges most material to the

development community, and disseminate via existing platforms, such as the BEAM Exchange.

In line with the terms of the GEFA contract under which OPM is providing its services as the DSU,

the intellectual property rights of all material produced by OPM as the supplier, such as the evaluation

report, shall be the property of OPM. Under the terms of the contract, OPM has granted DFID a

world-wide, non-exclusive, irrevocable, royalty-free licence to use all the material. The DSU is

currently doing so, and will continue to store all material related to the evaluation on a Dropbox which

is only accessible by personnel working under the DSU.

24 DSU TOR.


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Annex C MTE Findings

C.1 How well is Essor designed sustainably to improve the business environment?

Despite addressing to an extent seven out of the 11 Private Sector Traps identified in the DFID

business case25, Essor is not well designed to improve the business environment because the

programme:

• Lacks a systematic programmatic approach to private sector engagement and the identification

and prioritisation of business environment reform opportunities;

• Lacks a robust and flexible system to adjust resourcing and planning based on traction of the

interventions; and

• Is based on a weak theory of change, which itself is based on unproven assumptions namely:

Lack of evidence of a direct link between BER and poverty reduction – BER is normally more

effective when part of a broader package of support to businesses;

The ToC is not specific enough about the types of issues it will tackle. Improving BER in

general may have little or no impact on MSMEs. An important missing piece is how Essor will

identify and prioritise the BER issues, which will provide a benefit for their target group;

Sufficiently favourable stability and security is one of the assumptions of the theory of change,

yet as the PECA points out fragility and instability are endemic features of DRC. The failure

of the ToC to define what would constitute a sufficiently favourable environment should be

rectified; and

Institutional capacity is assumed, and yet the PECA highlights issues with management and

incentive systems within government, which seem to undermine this.

C.1.1 To what extent is Essor's design based on a valid theory of change?

Are the intervention logic and assumptions consistent with accepted theoretical

frameworks?

The intervention logic and assumptions are broadly consistent with accepted theoretical frameworks

but do not appropriately address the challenges of working in a fragile and conflict-affected state

(FCAS).

Business environment reform (BER) aims to reduce the costs and risks of business activity

by improving poor government policies, laws and regulations, and by stimulating competition

through new market entrants.26 Burdensome business regulations have a proportionally greater

impact on MSMEs – by reducing the time and cost of complying with business regulation, MSMEs

will benefit from reduced overhead leading to increased profit, and potentially increasing competition

as more MSMEs enter the market.

According to DCED, 'the business environment is a complex of policy, legal, institutional and

regulatory conditions that govern business activities. It is a sub-set of the investment climate and

includes the administration and enforcement mechanisms established to implement government

25 See full list in response to question C.2.2 b below. 26 DCED https://www.enterprise-development.org/implementing-psd/business-environment-reform/ accessed May 2018.

https://www.enterprise-development.org/implementing-psd/business-environment-reform/


ePact 58

policy as well as the institutional arrangements that influence the way key actors operate (e.g.

government agencies, regulatory authorities, business associations, etc.).'27

The Business Environment Working Group of the Donor Committee for Enterprise Development (DCED) has defined ten functional areas of business environment reform:

• simplifying business registration and licensing procedures;

• improving tax policies and administration in ways that minimise unnecessary costs to business

and optimise public benefits (e.g. simplifying processes for paying taxes, avoiding excessive

taxation, enhancing tax compliance)

• enabling better access to finance;

• improving labour laws and administration;

• improving the overall quality of regulatory governance and frameworks;

• improving land titles, registers and administration;

• simplifying and speeding up access to commercial courts and alternative dispute-resolution;

• broadening public–private dialogue processes, with a particular focus on including informal

operators;

• improving access to market information; and

• developing appropriate quality standards.28

Evidence from the research literature shows a strong positive correlation between quality of business

environment and per capita GDP, economic growth, and score on the Human Development Index.

The World Economic Forum's Global Competitiveness Report traces a strong correlation, and

strongly suggests a causal relationship, between the business environment and competitiveness,

which it defines as 'the set of institutions, policies, and factors that determine the level of productivity

of a country. The level of productivity, in turn, sets the level of prosperity that can be reached by an

economy. The productivity level also determines the rates of return obtained by investments in an

economy, which in turn are the fundamental drivers of its growth rates. In other words, a more

competitive economy is one that is likely to grow faster over time', and will in turn benefit MSMEs.29

However, the theoretical framework breaks down somewhat when applied to an FCS context. Often

fragile countries are characterised by no regulation or inappropriate regulation – appropriate BER

activities (e.g. developing appropriate quality standards) may increase the costs of compliance rather

than reducing it.30 The intervention logic here should focus on formalising markets which will enable

investment (e.g. financial regulation, creating a licensing system for fisheries – as is needed in

Somalia), or protecting the formal market from unfair competition from the informal sector (e.g.

Rwanda coffee mark, trademark/ copyright laws).31 BER which focuses on transaction costs may

therefore not result in improved competition, and this is borne out by the evidence.32

Frameworks on PSD development in an FCS also highlight the difficulties of tackling multiple

important challenges in an environment of extreme institutional weakness, reflecting a lack of both

public and private sector capacity and of trust, which can derail development programmes. The

27 DCED, Supporting Business Environment Reforms: Practical Advice for Development Agencies, DCED, 2008, p. 3. DCED is a multi-donor group whose members include the World Bank Group, UNDP, UNIDO, USAID, DFID, GIZ, NORAD, DANIDA, SIDA, and the Netherlands Ministry of Foreign Affairs. Its Business Environment Working Group (BEWG) has authored and sponsored extensive research on BER. 28 DCED BE Working Group, How to Create an Enabling Environment for Inclusive Business, DCED, October 2016 29 WEF (2014) The Global Competitiveness Report 2014–2015, p. 4. 30 Koh, Hegde and Karamchandani, who surveyed 37 businesses serving the poor in Asia, Africa and Latin America, found that 63% felt constrained by absent/ ineffective standards: Beyond the Pioneer: Getting Inclusive Industries to Scale, 2014 31 DCED BE Working Group, How to Create an Enabling Environment for Inclusive Business, DCED, October 2016 32 See Wennmann, Ganson, & Luiz (2017) Operational Experience of Business Environment Reform Programming in Fragile and Conflict-Affected States, Business Environment Reform Facility (BERF), July 2017, p. 7


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literature emphasises sequencing and prioritisation as critical elements of programme design and

donor collaboration is encouraged to ensure that development partners are working on a small

number of critical issues.33 While BER is seen as an important tool in unlocking PSD, the

identification and sequencing of the BER priorities are as important.

However, these aspects of prioritisation and sequencing are not explicitly addressed in the Essor’s

Theory of Change (ToC).

Two other assumptions can also be said to be killer assumptions for DRC and should be built into the intervention logic:

• Sufficiently favourable stability and security is one of the assumptions of the theory of change, and yet fragility and instability are endemic (defining) features of FCAS. It is not clear from the ToC what constitutes a sufficiently favourable environment, and this should be defined.

• Sufficient institutional capacity is assumed, yet the PECA highlights issues with management and incentive systems which seem to undermine this (low legitimacy and capacity of institutions (and low trust between stakeholders) is one of the core characteristics of an FCAS.34).

The ToC and intervention logic should take account of these risks with a view to:

• designing interventions less susceptible to such risks; and

• maintaining sufficient flexibility to reduce exposure to institutions and regions where risk appears to be growing and shift resources to less risky regions and partners.

Are the intervention logic and assumptions confirmed by evidence in the literature?

Essor's intervention logic and TOC assumptions are partially supported by evidence from

international experience, which indicates that BER is not sufficient to achieve poverty reduction

particularly in relation to conflict affected environments like DRC. The ToC does not take into

account the importance of targeting BER on the right interventions and partners to yield the

targeted impact benefits.

The literature review concluded the following regarding the links between BER and poverty

reduction:

• This review did not find any evidence in the literature confirming that BERs directly lead

to poverty reduction. A direct causal link may or may not exist – to be sure, it is difficult to

establish causation between BERs and poverty reduction because of the wide range of other

potentially influencing factors (both observable and unobservable). Indeed, as the World Bank

(2015a) notes, there is some evidence tying BERs to faster economic growth, but the evidence

is far from concrete. Evidence of causation is likely to require greater focus at the country level,

and more emphasis on the outcome of small and medium-sized enterprises (SMEs) since that is

where BERs have their greatest impact (World Bank, 2015a).

• In their systematic review assessing the evidence of the impact of BERs on poverty, White and

Fortune (2015) corroborate the finding in this review that the link between BER and poverty

reduction is not direct. The authors examine 89 BER studies and find no direct evidence linking

BERs to poverty reduction. However, they conclude that there is evidence attesting to the

indirect effect BER has on poverty reduction through its impact on firm behaviour and

investment.

• BERs often help contribute to poverty reduction, but they may not always be effective on

their own. Thus, BERs have a crucial role to play in helping development programmes to be

33 See Ibid, p. 7, and Peschka, The Role of the Private Sector in FCS, World Bank, 2012, p. 25 and others. 34 MTE Literature Review and also World Bank Development Report, Conflict, Security & Development, IBRD, 2011.


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effective. Poverty reduction may not be the direct result of BERs, but such interventions are still

critical in establishing an environment where pro-poor growth and poverty reduction can take

place. Indeed, the World Economic Forum's Global Competition Report shows that the impacts

of direct interventions like M4P programmes are often short-lived without an enabling

environment where businesses can prosper (World Economic Forum, 2016). This suggests that

BERs may often be needed for market systems initiatives to succeed.

• On the adequacy of using the DB indicator as a measure of progress in BER, the review

concluded that while the DB Indicators have their advantages, they may not be sufficient

by themselves as a tool for measuring progress in the DRC.

Are the intervention logic and assumptions consistent with evidence about the implementation context?

The intervention logic and assumptions do not sufficiently take into account the fragility and lack of

capacity, which are overwhelming features of the DRC implementation context. Inter alia, the

intervention logic is silent on the challenges of engaging with the private sector and the need to

improve the demand side of the dialogue. BER does directly address one of the four binding

constraints to growth for DRC (government failures) described in the literature review and can impact

two others by improving the environment for private sector to invest in Infrastructure and Finance as

Essor is attempting to do in its A2F and A2E interventions.

The conclusions of the literature review are that BER is not sufficient in itself to impact poverty

reduction particularly in relation to conflict-affected environments like DRC; however, the

intervention may be important when it is used to apply to the binding constraints to growth

which were found to be relevant for DRC.35

• Government failures (absence of rule of law, particularly uncertainty of legal and regulatory

frameworks and low enforceability of contracts);

• Lack of finance (particularly damaging for the agriculture sector);

• Lack of infrastructure (availability and distribution of electricity; weaknesses in transport

infrastructure, particularly those areas where river transportation is not available); and

• Conflict and insecurity (in Orientale and South Kivu).

The review found that there was strong evidence that BER can be used to address government

failures, but the evidence was weaker for its effectiveness in tackling issues regarding access to

finance and infrastructure. In these areas, BER is likely to be effective only when combined with

other broader sector interventions, as Essor is seeking to do in collaboration with ÉLAN through the

A2E and A2F programmes.

The World Bank Doing Business Rankings may not be an appropriate measure of the impact

of changes on MSMEs. DB has a bias towards measuring the impact of changes on larger

companies and it is therefore not necessarily the case that MSMEs would experience the same

benefits.

35 The PSD literature review defines 'binding constraints' as those determined by the growth diagnostic framework developed by Hausmann et al. (2004). When Ulloa et al. (2009) applied the growth diagnostic framework to the DRC, they found the following binding constraints, all of which overlap with the constraints identified by World Bank (2008b) and ADB (2013): Government failures; Lack of finance; Lack of infrastructure (availability and distribution of electricity; Conflict and insecurity


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Bias towards larger enterprises within Doing Business indicators

To ensure comparability of data across countries, the DB indicators employ several assumptions

about the characteristics of the businesses affected by the business environment. The standard

or model enterprise for the Starting a Business indicator36:

1. is a limited liability company (or its legal equivalent). If there is more than one type of limited

liability company in the economy, the limited liability form most common among domestic

firms is chosen;

2. operates in the economy's largest business city;

3. occupies an office space of approximately 929 square metres (10,000 square feet);

4. is 100% domestically owned and has five owners, none of whom is a legal entity;

5. has start-up capital of 10 times per capita income (US$4,300, using nominal per capita

GNI);

6. performs general industrial or commercial activities, such as the production or sale to the

public of products or services. The business does not perform foreign trade activities and

does not handle products subject to a special tax regime – for example, liquor or tobacco.

It is not using heavily polluting production processes;

7. leases the commercial plant or offices and is not a proprietor of real estate;

8. pays an annual lease for its office space equivalent to the country's annual income per

capita;

9. does not qualify for investment incentives or any special benefits;

10. has at least 10, and up to 50, employees one month after the commencement of

operations, all of them domestic nationals;

11. has a turnover of at least 100 times annual income per capita (US$43,000 in DRC, using

nominal per capita GNI); and

12. has a company deed 10 pages long.

The assumption that instability and a lack of security in DRC will not impinge on project

implementation is implausible. The country is in the midst of a profound political, economic and

financial crisis and has suffered an estimated five million violent deaths in the past 20 years.

Therefore, instability and violence are not only ever-present but also, as the PECA outlines, is

integral to the strategy used for governance of the country.

The PECA completed for the MTE found that 'the interests of poor producers, poor consumers and women have little influence on political decision making and government action' and also that the interests of MSMEs (as opposed to those of large private sector firms) are not effectively represented although government is increasingly under pressure to respond to private sector needs. Addressing the low capacity of MSMEs to raise their voice in the dialogue process is an important factor in a successful PPD process which is not mentioned in the ToC or assumptions. Don Hetherington highlights the problem of unbalanced dialogue, and the common mistake of programmes only focusing on the government side of the dialogue, concluding: 'Both sides need significant simultaneous support in order for PPD to break the previous equilibrium and lead to positive outcomes.'37 Appropriate techniques to address this challenge include surveys (which is within the Essor intervention), research and advocacy support and/or BMO strengthening programmes.38

36 Hetherington, Don, What works in BER in SSA, DFID 2017, p. 31. 37 Ibid. 38 See among others Hetherington, Don, What works in BER in SSA, DFID 2017, p. 31, and DCED BE Working Group, How to Create an Enabling Environment for Inclusive Business, DCED, October 2016, p. 28


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C.1.2 Has prioritising government as a key partner and beneficiary compromised the ability of the project to achieve its objectives?

Lack of systematic engagement with the private sector has impacted the ability of the project to

achieve its objectives. Government is a key partner and beneficiary and should be prioritised, but

this should not be to the exclusion of the private sector which needs significant support to properly

engage in the identification and prioritisation of issues, which we have previously identified is key to

the success of BER in FCAS.

a) Have the risks associated with government as a key partner and beneficiary in the

current political environment been anticipated and adequately mitigated in the project

design?

To a large extent the risks were anticipated and mitigated in the original project design, which

highlighted PPD as a key tool for the programme and proposed an adaptive design (based on

learning by doing, and the ability to adjust resourcing to programme traction and experience with

government partners), supported by a comprehensive MRM and MSME survey process to support

its decision making.

The MTE PECA characterises the DRC political environment as one dominated by the 'kleptocratic

nature of governance' organised and channelled through patronage practices, which uses

'governance by confusion' (a continual failure to implement adopted policies or laws). The risks of

working with government as a key partner in such an environment are numerous and

profound.

The PECA notes that the political environment is actively hostile to coherent and structured

policy implementation and the interests of MSMEs:

'The key features of the political economy of the DRC determine the relationships between

the government, politicians and the private sector and the business environment. Those were

summarised by Englebert (2016) as governance by confusion, dithering, delegation, theft,

patronage and violence. While all those features are important and interlinked governance

by theft and patronage are key to understand the implications of the current political economy

context for the private sector and business environment.

Beyond the weakness of formal institutions, the relationships between government,

politicians and the private sector are mainly based on informal and personal relationships

(family and economic interests) at the highest level (corrupt elites). The frontiers between

government (and, more broadly, military and police actors), politicians, and the private sector

are porous. The proximity and relations between political actors and large enterprises

induces a conflict of interests that influence negatively the policies regarding the promotion

and the development of SMEs and poor producers and consumers.'

In such an environment for the programme, given the weak capacity of MSMEs, the programme

should also include consideration of the need to strengthen the private sector side of the dialogue,

and yet this aspect is silent.

The experience of Essor so far illustrates less the risk of working with government partners

than the risk of selecting a small number of interventions that depend on a small group of central

government partners and beneficiaries:

• The selection of CPCAI as the principal central government interlocutor was a logical choice, but

the risk exposure became apparent when CPCAI was dissolved.


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• For A2F, the insurance regulator and the Central Bank are the main partners and beneficiaries,

and neither one has been overly receptive to Essor support. Consequently, A2F interventions

have achieved little.

• At the same time, the OHADA, MSME and AC workstreams have a richer mix of partners and

have achieved more (see the discussion of workstream performance in Technical Annexes).

MSME and AC workstreams have focused on sub-national taxes and fees, and their emphasis

has been as much on reducing the number of fees and levies through consolidation and

simplification – thus increasing transparency and reducing opportunities for officials to extract

bribes – as on reducing the overall fiscal burden.

The question then becomes whether problems such as access to finance and access to electricity

can be addressed without wholesale legal, regulatory and institutional reform. Evidence from several

Essor interventions indicates, however, that some important constraints can be resolved with more

local and/or specialised interventions, especially when they do not threaten powerful vested

interests.

• The A2E workstream has met with considerable success putting in place a set of regulations

and processes for private investment in solar energy projects involving both a national agency

(the UCM in the Ministry of Energy and Water Resources) and provincial governments. There is

a possibility that the process could fall apart once the system starts to deal with real investment

proposals and transactions, but it may also prove sufficiently robust to facilitate successful

investments. Based on interviews with the A2E workstream leads and counterparts, and on

international experience of PPPs in infrastructure, the success to date is most likely due to

several factors:

o Separation between the interim regulatory agency, UCM, and the authorities responsible for

awarding contracts to private developers (separation between the regulator and the

implementing authority is recognised best practice in infrastructure development through

PPPs);

o Provincial and local governments rather than the central government, as the key counterparts

in the development of the pilot projects;

o The provincial authorities, which will be awarding the contracts, may see that they have more

to gain from successful development of solar energy systems than from trying to hijack the

procurement process for personal gain; provincial and local governments tend to be more

accountable to their constituents than the national government and may more accurately see

the benefits these projects will bring. For example, expanded availability of affordable

electricity is likely to stimulate private sector investment, production, and employment, which

in turn can increase public revenues for provincial and municipal governments; and

o Complementarity in the participation of donors, including DFID, the World Bank, USAID and

the AfDB in establishing the regulatory and institutional framework and supporting the

recruitment of private developers, and of various donor-supported financial institutions in

financing the projects, will limit, if not entirely prevent, corruption of the process.

• Another example of relative success in working with government is OHADA. The OHADA

workstream has succeeded in creating a largely automated system for business registration,

which substantially reduces the time and cost to create a company. The features of the system

include a simpler and cheaper registration process for a new category of business, the

'entreprenant', or sole proprietor. The system has also digitised all company records held by the

RCCM (the Commercial and Movable Property Registry) and has obliged financial institutions to

submit electronic records of assets pledged as collateral, which can be searched for a fee by


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potential lenders and investors, and which constitutes an embryonic form of a credit bureau.

OHADA has so far set up two registration centres employing the new system, with a third one to

be opened shortly in Lubumbashi and others to be established in most of the main urban centres

in DRC over the next two years. The database and communications backbones for the system

have already been developed by OHADA and are operational, in large part because its

interventions focus more on practical implementation than on high-level policies.

Based on discussions with the Workstream leads and counterparts, the keys to the relative

success of this intervention are:

DRC's obligation under the OHADA Treaty, to adopt such a system;

Working with a system based on principles of subsidiarity and decentralisation. Company

registration is done at the commune level, at the local branches of the RCCM, each of which

is governed by the local commercial court. The court comprises magistrates as well as

'judges consulaires', who are not legal professionals but are elected by local businesspeople,

and the courts are administered by the 'greffier du tribunal', the clerk of the court, who is a

public official. A national registry maintained by the Centre National OHADA (CNO) in the

Ministry of Justice consolidates all the records from the local branches, but it has no

operational or regulatory authority over the commune branches. Finally, there is a regional

registry in Abidjan that consolidates registry records from all OHADA member countries in a

central database, which can be accessed by businesses in all OHADA countries; and

Alignment of incentives. OHADA has worked with CNO on the national-level registry to

digitise records and to develop the database and backbone for the registration system, but

because the national RCCM does not interact directly with businesspeople but is rather a

central repository of data, it has no ability to extract rents from the process. In addition,

OHADA has supported CNO to become largely autonomous, both operationally and

financially. Since CNO's future revenues will derive largely from selling information from the

national registry, it has every incentive to cooperate with Essor to make the system work as

well as possible.

b) To what extent does the Essor Portfolio address the key constraints identified in the

ex-ante diagnosis?

The Essor Portfolio is working to address 7 out of 11 key traps for private sector development

identified in the DFID Business Case as shown in the table below.

Table 3 Private Sector Development ‘Traps’ in DRC from DFID Business Case

Private Sector Development 'traps' in DRC Essor response

Credit Constraints

1

The private sector needs credit to grow; but without a sufficiently developed private sector, financial institutions themselves struggle to obtain sufficient funds to on-lend to the private sector to facilitate its growth.

Not addressed within the Essor Portfolio as development of the formal banking sector is not within the interventions of the current project.

2

Firms need credit to establish and grow; but to secure credit they need to have already grown large enough to have generated sufficient collateral and existed long enough to demonstrate the profitability of their business model and their creditworthiness.

Tangentially addressed through the Leasing intervention of A2E.


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3

The banking sector needs a sufficiently large formal MSME sector in order to provide access to credit; but without the opportunity to access credit, firms currently face little incentive to formalise.

Reducing barriers to formalisation is being addressed through the OHADA business registration intervention. Improving access to credit for MSMEs (except through leasing) is not being addressed.

Corruption

4

The private sector needs reduced corruption to grow and develop; but without a well-developed, diversified private sector, there are insufficient broad-based economic interest groups to fight corruption.

No intervention to strengthen the capacity of the private sector to advocate against corruption e.g. through chamber strengthening programmes. Cost of Corruption intervention does provide for advocacy and so helps to address this trap.

5

The private sector needs reduced corruption to grow and develop. In turn, the state needs resources to develop the capacity to tackle corruption. However, existing corruption impedes the development of the private sector (and hence the tax base) and captures revenues before they can be received by the state. SEE COMMENT ON 4.

6

The private sector needs an absence of corruption to grow and develop; but existing private operators (and their public official counterparts) are resistant to anti-corruption efforts which would make them worse off.

Complexity and Costs of Compliance

7

The private sector needs simple, inexpensive regulation and taxes to grow and develop. In turn, the state needs resources to develop the capacity to develop such regulation. However, existing regulation and taxes impede the development of the private sector (and hence the tax base).

OHADA is working on reducing the cost of compliance with regulation.

Infrastructure, logistics and access to land

8

To develop, the private sector needs access to land and infrastructure. In turn, the state needs resources to provide infrastructural public goods and manage land use. However, existing infrastructure and land management impede the development of the private sector (and hence the tax base).

The A2E intervention is working on expanding access to energy. There is no Essor intervention addressing land access.

Conflict and Confidence

9

The private sector needs an absence of conflict to grow and develop. However, the absence of a developed and diversified private sector is itself one of the drivers of conflict as it means there is a low opportunity cost, and significant benefits, of taking up arms. GENERAL Essor (IF SUCCESSFUL) WILL ADDRESS THIS TRAP.

The results of Essor and

ÉLAN will together address this trap.

Coordination Failures

10

Private sector development requires the development of firms. To develop, firms require markets for both their inputs and outputs. Without a sufficiently developed private sector, these markets do not exist and firms cannot develop.

ÉLAN is working on market development and Essor is working to an extent on BER interventions to support ÉLAN but this could be strengthened.

Capacity

11

Private sector development requires the development of firms. For firms to develop they require capabilities acquired through formal training as well as learning-by-doing. Without a sufficiently developed private sector, firms lack opportunities for learning-by-doing.

Essor is not working on skills development for private sector firms.


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c) To what extent have the interests of the private sector, poor and women producers been correctly identified and incorporated into intervention design?

Interests have been partially incorporated into intervention design. Several Essor workstreams have

taken as their point of departure the binding constraints identified by business operators themselves.

Only one, Anti-corruption, has designed interventions that focus on the unique needs of women

entrepreneurs.

The political context is one in which the interests of MSMEs, the poor and women have little influence

in the policy process and Essor is not working on strengthening their capacity to advocate and

engage in policy reform. For the market interventions of A2E and A2F, there is no evidence that

Essor has been systematically engaging with the suppliers or potential investors in these sectors.

Overall, Essor's progress in the gender and inclusion space has been (a) slow, even taking into

account the challenges of working in the DRC context, and (b) not well measured (see point below

about disaggregated data). Notable too is the fact that at a workstream level, most of the Essor

gender-related activities focus on training and sensitisation, with less focus on the concrete and

facilitative actions which are likely to produce more transformative change.

The PECA found that 'the interests of poor producers, poor consumers and women have little

influence on political decision making and government action' and also that the interests of MSMEs

(as opposed to those of large private sector firms) are not effectively represented although

government is increasingly under pressure to respond to private sector needs. By working more

systemically with the private sector, either through the use of publicised surveys, or through a

structured public–private dialogue process, Essor could help bring MSMEs' voices into the BER

process, and increase pressure on the government for reform. Essor's intervention designs have

been based on two main sources of information about the interests of the target beneficiaries. Essor

carried out an initial survey of more than 900 MSMEs in Kinshasa, Lubumbashi and Goma, and the

interests and preoccupations of the survey subjects were taken into account in the design of some

of the interventions. The survey finding that access to electricity and access to finance were the two

leading business environment constraints led to establishment of the A2E, AC and A2F workstreams.

Other Essor interventions, including MSME taxation, A2F, OHADA business registration, and

construction permits (now cancelled), were based in whole or in part on the Doing Business

indicators. The DB indicators are not based on direct interviews with private sector operators, but

their methodology looks at the regulatory processes faced by domestic small and medium-size

companies.

In the case of A2F, it is not obvious that the two main interventions follow from the Essor

survey findings or accurately reflect the interests of the private sector, especially MSMEs.

Access to finance is a broad area, but typically when businesspeople complain about lack of access

to finance they are not talking about insurance and leasing but rather about their inability to obtain

debt or equity capital from financial institutions to fund business expansion, or about the onerous

conditions financial institutions place on business borrowers that may make the cost of available

finance prohibitive.39 Expanded insurance offerings and leasing products, and easier access to them,

39 World Bank (2016), 'Governments around the world have introduced reforms to attempt to make it easier for informal firms to formalize. However, most informal firms have not gone on to become formal… Firms that are larger, and that look more like formal firms to begin with, are more likely to formalize, providing guidance for better targeting of such policies. However, formalization appears to offer limited benefits to the firms, and the costs of personalized assistance are high, suggesting that such enhanced formalization efforts are unlikely to pass cost-benefit tests.' N. Benhassine, et.al., 'Can Enhancing the Benefits of Formalization Induce Informal Firms to Become Formal?', World Bank Working Paper 7900, November 2016, http://documents.worldbank.org/curated/en/579081480451260134/pdf/WPS7900.pdf , Retrieved 23 April 2018.


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may improve conditions for the companies that use them, but there is no sense in which the lack of

these instruments is a binding constraint.

In practice, although Essor's performance indicators are meant to be disaggregated by sex, and

although poor populations and, especially, women are meant to be the primary beneficiaries of its

interventions, there is little evidence that its interventions benefit women. There is, furthermore, no

gender indicator in the logframe: indicator 5.1 should include a specific reference to gender

inclusivity.

The AC workstream is largely designed around women and poor entrepreneurs, and many of

the beneficiary organisations are woman-focused or businesswomen's associations. The

North Kivu cross-border trade intervention will focus on low-income traders, and the beneficiaries

include the Plateforme de l'Entrepreneuriat Féminin (PEF/RDC) and the Association des Mamans

Commercants du Congo pour le Développement (AMACCOD). AC is also considering a similar

intervention in Katanga at the Kasembelesa border crossing between DRC and Zambia, where

women traders are victimised by sexual extortion – demands for sexual favours as the price of getting

their goods through the border. The evaluation team has recommended that this be prioritised. A

further recommendation emerging from a meeting with DFID on 7 February suggests that Essor

should collaborate more actively with La Pépinière, on the grounds that women's economic

empowerment could help women to resist corruption with improved entrepreneurial and negotiating

skills.

In the near to medium term, business environment reforms, including several of those supported by

Essor, will benefit large and medium enterprises more than micro and small enterprises. Examples

include:

• Access to Finance: Development of a market and a legal and regulatory framework for private

insurance and leasing will almost certainly benefit medium and large enterprises already

operating in the formal sector more than micro and small enterprises, many of which remain

informal.

• Access to Electricity: The development of solar-powered mini-grids will probably stimulate

substantial productive investment flows and enterprise creation in the areas they serve, but the

direct beneficiaries will tend to be medium and larger enterprises: both newly established firms

attracted by a reliable supply of affordable electricity, and existing firms that become able to

expand. Introduction of easy prepayment options may, however, increase access for smaller

enterprises and poorer households.

• OHADA: Incorporation of OHADA acts into Congolese law and the OHADA workstream's

support to the GUCE and RCCM will, by definition, mainly benefit companies operating in the

formal sector. Establishment of the GUCE branches, with their streamlined and transparent

procedures, will make it easier and less time-consuming for investors to navigate the process of

setting up their companies but it is unlikely to incentivise a large number of businesses to migrate

from the informal to the formal sector.40 The introduction of standardised registration fees,

including a lower fee of $40 for sole proprietorships and entrepreneurs, will benefit many

companies, but almost all of them will be companies that would have registered in any case. A

fee of $40 is still prohibitive for an informal business whose monthly profit may not approach that

amount. The AC workstream has supported the Ministry of the Family and Gender to disseminate

information about the new Family code, which facilitates women's engagement in commercial

transactions (registering a business, opening a bank account) without needing their husband's

signature.

40 Ibid.


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Interventions that seek to improve the business environment for larger and more sophisticated

enterprises can lead to greater increases in economic performance and household incomes via

direct and indirect multiplier effects on employment and wages41 than interventions that focus mainly

or exclusively on micro- and small enterprises and sole entrepreneurs. A larger company, thanks to

reforms that increase its access to finance and/or electricity, may be more likely to invest in expanded

capacity or new projects than very small firms that may use any additional surpluses for consumption

spending. Business environment reforms that lead to new investments by those larger firms may

create more new jobs and lead to greater increases in household incomes than BER targeting

smaller firms.

Interventions that benefit larger enterprises may also serve to create or strengthen competitive value

chains in productive sectors through the transfer of technology and know-how, and by introducing

more efficient systems and organisation to large segments of a value chain (e.g., through distribution

of inputs and know-how to subcontractors, by improving the quality and uniformity of goods produced

by MSME subcontractors, and by rationalising purchase and pricing of those inputs).42 These

benefits, however, are unlikely to manifest themselves within the life of the project, so it will be difficult

to capture them in the current MRM system. This difficulty is further compounded by the priority given

in the existing results framework and logframe to near-term increases in household income among

poor populations. This is discussed further in the section of this report which addresses MRM

challenges.

C.1.3 To what extent are the assumptions informing project design proving valid in practice?

It is too early to tell whether or not the interventions are generating or are likely to generate

the targeted impacts.

The political context of DRC does not favour BER and there are substantial obstacles to PPD

with MSMEs as a means of building political consensus. This does not mean that political

support for some reforms is impossible to achieve, but opportunities may be limited and

dependent on alignment with the interests of the politically influential. Similarly, the political

context is likely to militate against effective capacity development in public sector

organisations.

Assumption 1: There is sufficient and sustained political support for BER e.g. 'Buy-in to reform

agenda can survive turnover in institutional leadership; Key actions are politically feasible to achieve;

Essor interventions do not become politically sensitive; Resistance to reforms by those with vested

interests in maintaining the status quo or reversing reforms can be mitigated.'43

41 Direct multiplier effects are increases in employment and income of firms or individuals that become upstream suppliers or downstream distributors for the larger firms that directly benefit from a given intervention. Indirect multiplier effects are increases in small business activity and individual incomes from the expenditures by employees of the direct beneficiaries on food, housing, entertainment, transport, clothing. These multiplier effects vary by location and by industry – construction, for example, has a higher direct multiplier effect than many other industries because of its need for building materials, many of which are procured locally. Other industries, like export-oriented cut-and-sew garment manufacturing, tend to have lower direct multiplier effects, since most inputs are imported. 42 'FDI can be particularly beneficial for export sectors, as foreign companies help integrate developing countries into the global economy by easing access to foreign markets and including local enterprises in global production chains. Experiences from other world regions also suggest that FDI can help facilitate export diversification'. World Economic Forum (2011), Africa Competitiveness Report, p. 3, http://www3.weforum.org/tools/afcr2011/pdf/, Retrieved 23 April 2018. 43 Definition of business environment reform: the DCED defines the business environment as a complex of policy, legal, institutional, and regulatory conditions that govern business activities. It is a sub-set of the investment climate and includes the administration and enforcement mechanisms established to implement government policy, as well as the institutional arrangements that influence the way key actors operate (e.g., government agencies, regulatory authorities,

http://www3.weforum.org/tools/afcr2011/pdf/


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The findings from the PECA strongly suggest that elite capture and a system of patronage will make

achievement of the outcomes of the results chain very challenging. The PECA notes that the political

environment is actively hostile to coherent and structured policy implementation and the interests of

MSMEs:

'The key features of the political economy of the DRC determine the relationships between

the government, politicians and the private sector and the business environment. Those were

summarised by Englebert (2016) as governance by confusion, dithering, delegation, theft,

patronage and violence. While all those features are important and interlinked, governance

by theft and patronage is key to understand the implications of the current political economy

context for the private sector and business environment.

Beyond the weakness of formal institutions, the relationships between government,

politicians and the private sector are mainly based on informal and personal relationships

(family and economic interests) at the highest level (corrupt elites). The frontiers between

government (and, more broadly, military and police actors), politicians, and the private sector

are porous. The proximity and relations between political actors and large enterprises

induces a conflict of interests that influence negatively the policies regarding the promotion

and the development of SMEs and poor producers and consumers.'

The PECA also noted that there has been progress in the development of policies and regulation for

improving the business environment especially where there is donor support, but very limited

commitment to the implementation of policies and regulation.

The success of the OHADA intervention demonstrates the impact of political support on the success

of a particular intervention but other interventions (A2F) have been challenged by lack of political

support. This assumption could be written as a risk that can be mitigated through a good analysis of

the political economy of the specific intervention and will be a critical success factor in the selection

of interventions and partners.

Assumption 2: Effective public-private dialogue is feasible: e.g. 'MDAs are open to receiving

and incorporating dialogue from the private sector; The private sector is willing to engage with the

public sector and believes it is worthwhile; Awareness of issues is sufficient to stimulate reform

actions; Fear of reprisals does not limit sharing of critical inputs by MSMEs.'

Whilst the PECA confirms the assumptions of the PSD that BER are needed to address the

constraints to growth, it casts doubt on the commitment of government to reform and the strength of

the private sector to effectively advocate for reform. The PECA notes (as in the quote in the previous

section) that the political environment is actively hostile to coherent and structured policy

implementation and the interests of MSMEs. The PECA also noted that there has been progress in

the development of policies and regulation for improving the business environment especially where

there is donor support, but very limited commitment to the implementation of policies and regulation.

Given these findings, it is clear that the BER process envisaged in the Essor intervention logic, which

assumes constructive public-private dialogue and which also assumes government's willingness to

undertake the legal, regulatory, and institutional reforms that stem from that dialogue, can only

succeed in the short term where there is alignment between MSME and elite interests. In the long

term, for meaningful dialogue to occur the Private Sector half of the dialogue needs to be

and business membership organisations including businesswomen associations, civil society organisations, trade unions, etc.).” https://www.enterprise-development.org/implementing-psd/business-environment-reform/


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strengthened to give MSME's a stronger voice in the advocacy process, which has not to date been

attempted by Essor.44

Assumption 3: Institutional capacity for implementation is developed to, and maintained at,

a sufficient level: e.g. 'High rates of turnover at MDAs do not occur or, if they do, do not negate the

benefits of capacity building for the target MDAs; Officials have interest and find value in developing

skills in areas relevant to Essor-supported reforms; The work environment allows trained officials to

apply their skills for reform actions.'

The PECA found that: 'While technical assistance can improve the ability of public actors (institutions

and civil servants)… [in] the formulation of reform programmes, it [has] largely proved to be

ineffective as far as implementation is concerned when political commitment is lacking'. This implies

that any support for BER needs to be selective and based on areas where there is political

commitment. Sometimes this involves reform at a local rather than central government level for

example Workstreams like A2E, OHADA, MSME, which work with provincial and local/communal

administrations as well as (or in the case of MSME, to the exclusion of) central government.

Economic and security environment is sufficiently favourable: e.g. 'Local and global security

and macroeconomic conditions do not undermine stability and economic growth.'

The assumption that instability and a lack of security in DRC will not impinge on project

implementation is implausible. The country is in the midst of a profound political, economic and

financial crisis. Though the civil war ended in 2003, armed conflict persists, mainly in the eastern

part of the country and the Kasaïs. The conflict has caused an estimated five million violent deaths

in the past 20 years.45 Therefore, instability and violence are not only ever-present but also, as the

PECA outlines, is integral to the strategy used for governance of the country.

Therefore, any meaningful intervention needs to be designed to operate in an unfavourable

environment. The ToC assumption, if valid, needs to clarify what circumstances constitute sufficiently

favourable.

C.1.4 Is there a better alternative to Essor's approach that is viable in the DRC context?

Based on the evidence presented above, a more systematic and strategic engagement with the

private sector may support improved outcomes, particularly in the A2E and A2F programmes.

Additionally, a more adaptive and scalable approach closer to the original design may also help to

mitigate against the high risk of instability and government failure.

C.2 Is Essor appropriately organised and managed to perform effectively? [Efficiency]


• Effectively managing a £35 million BER project in DRC is one of the more challenging tasks in development.

44 For example, Zimbisa is one example of a DFID-supported facility which has engaged in systematic support to civil society, research houses and business associations to strengthen the effectiveness and legitimacy of the dialogue. See Hetherington, PPD Interventions in SSA, Business Environment Reform Facility October 2016 45 The history and consequences of civil war and armed conflict in DRC over the past 20 years have been extensively documented and reported. The BBC (2017) provides a concise synopsis of these events; http://www.bbc.com/news/world-africa-13283212, retrieved 22 April 2018.

http://www.bbc.com/news/world-africa-13283212


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• Essor does not have an effective SMT driving project delivery in Kinshasa. Team leadership has been part-time until Feb 2018 with little senior support and limited authority over the workstreams.

• Into this void of managerial authority for Essor in Kinshasa, both DFID and PwC corporate have made interventions which, whilst well-intentioned and often seeking to address important weaknesses, have had the effect of further undermining team leadership. During the MTE and AR process, PwC cited DFID interventions as justification for some of the poor decisions made by the programme (e.g. the design of the logframe and theory of change).

• The lack of an effective SMT has resulted in weak strategic leadership and a lack of workstream accountability.

• Placing a full-time, francophone Team Leader in the project is a necessary but insufficient condition to improve Essor. It also requires a powerful SMT to the support the TL and this team to have the autonomy to manage the project.

C.2.1 Does Essor have the capacity and organisational arrangements to implement an adaptive project and its workstreams and interventions?

From inception Essor has not been designed around the principles of an adaptive facility with

overreaching objectives, and flexible interventions. Lack of an effective MRM system impeded

learning and adaption, as has the lack of stable local management.

The TOR on which Essor is based were entitled 'Management of the Flexible Facility for the Private

Sector Development programme in DRC'. The assumption embedded in the TOR was that 'The

multiple interconnected constraints to private sector development in DRC create a complex context

for this programme. Accordingly, DFID DRC will use a programming approach consisting of a flexible

portfolio of interventions.'

DFID has compiled a wealth of knowledge of the effectiveness of the flexible facility approach,

especially in conflict-affected countries. A recent brief describes Adaptive Programming as 'an

approach which enables the design, delivery, management and oversight of a project where there is

a conscious and systemic effort to, at all levels and on an ongoing basis for the life of the project,

learn about what works (and what doesn't), about changes in the political environment, and about

the needs of local actors – and to adapt, in real time, strategic aspects (including theories of change,

results frameworks, approaches) and operational details (e.g. systems, tools, resources, budgets)

with the aim of achieving systemic and sustainable change and increased impact.'46

A review of DFID flexible facilities in sub-Saharan Africa and South Asia (Heatherington, 2017)47

extracts several lessons from 20 DFID BER programmes in 15 countries, including DRC. These

lessons include:

• 'One of the most … important lessons … is to be opportunistic. The large majority of programmes

encounter exogenous shifts in programme conditions, and successful programming depends on

implementers to:

recognise how new conditions compromise the original theory of change;

identify new opportunities to achieve programme objectives;

discover or create links between existing programmes and new opportunities — the

challenge is not to scrap previous work and start again but to find ways to adapt current

46 Donovan and Manuel (2017) Adaptive Programming and Business Environment Reform – Lessons for DFID Zimbabwe, ERF, April. 47 Hetherington, Don, What works in BER in SSA, DFID 2017, p. 31, and DCED BE Working Group, How to Create an Enabling Environment for Inclusive Business, DCED, October 2016.


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programmes so that they can still be successful, perhaps using different partners or

structures, or by highlighting different objectives; and

abandon, pause, restructure or scale up workstreams depending on new analysis.

• 'While it may be possible to identify a set of desirable BER outcomes, achieving a specific

outcome requires that relevant actors have the capability, opportunity and motivation to drive

reform. The business environment is perceived to be too complex a system to reliably anticipate

this in advance, so a number of 'small bets' are created, where a potential opportunity for reform

is tested. Based on the early results of these experiments, programmes are abandoned,

restructured or scaled up.

• 'Maintaining flexibility in the choice of partner organisations (MDAs, BMOs, etc.) ensures that

partners are capable and motivated to achieve real reform. Programmes often suffer when they

are locked in early to a single or small number of partners.

• 'Government counterparts often change, whether through a change to the party in power or

simply the movement of ministers, permanent secretaries and other civil servants. This can be

managed by actively engaging…with government at a range of levels…[and] with a wide range

of staff at different levels in order to make the programme more robust to staff movements

(especially changes to minister or permanent secretary).

• 'BER covers a spectrum from technocratic to political reform, although where a specific

intervention lies will depend on context. With a government that does not support BER as a

political agenda, it may be helpful to focus on reforms that are perceived as apolitical process

improvements.'

We have used many of the principles from the Business Case, integrated with a set of guidelines

from the literature to describe features of an adaptive facility. It is our assertion that from the outset

the project deviated from this vision, which has undermined the successful implementation of the

project. We have outlined our perspective in the table below.


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Table 4 Features of Adaptive Facility and Essor Implementation

Core features of DFID's design of Essor as

an Adaptive Facility Essor's approach in implementation

Guiding outcome and impact targets: The

TORs called for the project to be adaptive

and opportunistic as the context changes,

requiring a programme design with minimum

specification in the opening phase.

Clear programme-level impact and outcome

statements should guide exploratory

interventions. These will act as a 'compass'

during the life of the project – not as

quantified targets for delivery and

performance.

From its inception, the project's design had become

more specific and less adaptive than the TORs

envisaged. Rather than setting out high-level impact and

outcome statements and then designing interventions

likely to achieve the desired results, Essor, from the

beginning, conceived of discrete sets of activities for

which it then specified impacts and outcomes with a

detailed design that offered little potential to be guided by

and to respond to emerging needs and opportunities.

The lack of a full-time local senior project manager

impeded Essor's ability to adjust programming based on

programme traction and respond to emerging needs and

opportunities.

Learning by doing with local actors: Work

in an exploratory way, addressing problems

local actors care about, rather than setting

out to introduce international best practice, or

to address pre-determined issues identified

through technical analysis (often by external

experts).

Learning at the tactical and strategic levels

should be continuous, involving frequent re-

assessments of: the context; current

interventions; interpretations of results; and,

brainstorming new intervention options.

Support local actors to identify and implement

local solutions in consultation with key

decision makers, instead of simply 'engaging'

with stakeholders with the aim of securing

'buy-in' to predetermined solutions.

A detailed business case, including detailed work plans,

budgets, VfM calculations, and impact projections, was

drafted for each of the workstreams and presented to

DFID for approval in January 2016, based on TORs

finalised in July 2015. These took an average of six

months to complete and ranged in length from 60 to 80

pages. The business cases were followed by concise

intervention summaries of 5 to 10 pages, submitted to

DFID in March 2017. The time and resources invested in

preparing the business cases and intervention

summaries and gaining approval for them may have

caused some reluctance on the part of Essor

management to re-assess and adapt some interventions

to changes in context.

The complex initial design described above impeded a

learning by doing approach. Instead, the programme

should have employed an approach where initiatives

which potentially supported the overall objectives of the

projects, started small and based on the traction and

engagement of the partner were resourced appropriately.

Few of the workstreams have shown evidence of

learning at the tactical and strategic levels and adapting

activities accordingly.48

The AC workstream invested in capacity building and

solution development with partners and was

overwhelmed with the number and scope of partners.

For this to be effective, the programme needs to be able

48 For example, the AC workstream has continued to work with counterparts that have shown little willingness to pursue reforms and which AC staff have recognised as 'low-capacity'.


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Core features of DFID's design of Essor as

an Adaptive Facility Essor's approach in implementation

to select and filter its partners based on experience, and

the political economy of the intervention.

To be effective, an adaptive, flexible facility must have

reliable real-time information that will permit

management to see what is working and what is not, and

to adapt accordingly; Essor had delays in establishing its

MRM which weakened its decision-making ability.

Short time horizons:

No linear progression from start to end

should be prescribed. Intervention planning

horizons will be shorter than for stable

contexts because of greater inherent

uncertainty.

Given the political and policy uncertainty in DRC,

intervention planning horizons should have been shorter

than for projects undertaken in more stable

environments, at least at the inception of a given

intervention. This would have afforded Essor the ability

to scale up activities that showed greater promise, and to

scale back or eliminate those with less potential to

deliver results. Such an approach would have permitted

Essor to adopt longer planning horizons for, and devote

greater resources to, some interventions, without

sacrificing the flexibility and adaptiveness inherent in the

initial project design.

Involve a range of actors to ensure

relevance, legitimacy and support for

reforms, and address both supply and

demand aspects, increasing capacity of

government to bring about change while

simultaneously supporting local stakeholders

to become more effective and active players

in reform.

There has been substantial investment in capacity

building for the government and investment in

consultation processes.

Investment in development of the demand for reforms

has not been as visible, except perhaps for the AC

project, and there has been little engagement with the

MSME BMOs in a systematic way to improve their

capacity for reform advocacy. For this to work

meaningfully we would expect to see a private sector

engagement strategy to support selection of private

sector partners.

C.2.2 Does Essor have operational processes in place to ensure its portfolio is trimmed and/or expanded strategically over time to achieve its objectives?

Essor does not have any such processes in place. Essor management did close the Construction

Permits workstream once it became apparent that further progress was impossible, but that was an

isolated case.

Change Management processes

The inception report stresses the importance of a 'well-defined change control process' to ensure

good programme governance and management. 'The change control process ensures that each

change proposed during a project is properly defined, considered and approved before being

implemented. This makes sure no unnecessary changes are made, they are implemented as


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smoothly as possible and that DFID resources are spent effectively.' The inception report outlined a

bi-level system of change control:

• 'Programme level: change control will follow the normal DFID procedures. We will consult DFID on proposed changes and ensure that we have agreement from the SRO. We will then seek to formalise these changes as a contract amendment, providing written justification and proposed updates to DFID's pro formas.

• 'Project level: changes to projects will largely be managed internally by the PMU in consultation with the project team and the programme lead, escalating to DFID and other relevant stakeholders as necessary. Any significant changes will be agreed with DFID and will be reflected in revised statements of work for the individuals involved. Records of all changes made will be stored on our knowledge management system'.

The inception report stated that 'The PMU will create templates for capturing lessons learned. Once

completed, these will be stored on box.com where the team will have access to them'. Essor does,

in fact, have a knowledge management system, and if these templates were ever created, used and

shared, this information was never shared with the MTE consultants.

Ability to adapt to changing conditions

In most of its workstreams, Essor has been slow or unable to adapt to changing conditions in

beneficiary organisations, either by modifying its interventions or changing its focus from one

counterpart organisation to another. Essor did shut down its Construction Permitting workstream

when it became apparent that conflicts between national and provincial governments over jurisdiction

would make any progress unlikely.49 In several other workstreams, even this level of flexibility has

been absent.

For example, the MSME workstream initially sought to work on e-payments of taxes and fees, and

engaged in discussions with COREF, the Ministry of Finance committee charged with fiscal reform

and strengthening tax administration, at both the national and the provincial levels. COREF,

however, intended to focus initially on national-level taxation and on larger enterprises, so the MSME

workstream, focusing on provincial and local government taxation and on MSMEs, abandoned these

discussions.50

This decision reflected an unfortunate lack of flexibility. E-payments in other countries, such as

Nigeria, have reduced the incidence of bribery and misappropriation of revenues. Nigeria introduced

electronic payment of Federal company taxes in 2007, as part of a set of reforms that included

issuance of a single taxpayer identification number for each registered company, applicable for both

Federal and state/local taxes. The e-payments system has since expanded to include state and

local-level taxes, as well as most payments to and by Government.51 If Essor had chosen to adapt

its approach to work more closely with COREF, it could have had a far more transformative impact,

even if the full effects of its interventions might take several years to become apparent.

49 See Essor 2017 Annual Report, p. 15. 50 Interview with an MSME Project staff. 51 The Central Bank of Nigeria in 2014 promulgated its 'Guidelines on Electronic Payment of Salaries, Pensions, Suppliers and Taxes in Nigeria', which stated, 'The objective of the end-to-end electronic payment of salaries, pensions, suppliers and taxes initiative is fully aligned with the core objectives of the National Payment Systems Vision 2020 (NPSV), which is to ensure the availability of safe and effective mechanisms for conveniently making and receiving all types of payments from any location and at any time, through multiple channels. This will reduce the time and costs of transactions, minimise leakages in Government revenue receipts and at the same time provide reliable audit trails, thereby making the Nigerian payments system comply with global payment standards.'


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We have not been made aware of any systematic process to review and scale up / trim down

activities either through a regular performance review (noting that the MRM was only operational in

December) or any other process.

C.2.3 How are partner and stakeholder relationship management processes affecting project performance?

Essor has not defined or applied standardised processes for the management of partner and

stakeholder relationships. A proper set of such processes would start with criteria for selection of

public sector partners, which emphasise their willingness to effect change; the institutional context

(i.e. can a potential partner make change happen largely on its own or does change depend on the

cooperation of other bodies, some of which may resist reform?); the potential to achieve desired

impacts by working with a given partner; and the operational, financial, and reputational risks of a

failed relationship. The absence of any such processes has resulted, variously, in poor choice of

partners, poor follow-through of Essor teams with partners; and inability of Essor teams to gain

traction with chosen partners.

Similarly, the 2017 AR recommended a holistic communications strategy and programmatic

approach to private sector engagement, but these recommendations have yet to be implemented.

Studies of investment climate projects flag public–private dialogue as an early entry tool for

engagement in FCS, as a way of building trust between government and private sector, prioritising

reforms and building momentum.52

Case studies and many key informant interviews detailed in the Technical Annexes and the Interview

summary yielded a common complaint that Essor staff have engaged with beneficiaries with the best

of intentions, but that follow-up has been lacking. In some cases, beneficiaries' and counterparts'

expectations have been unrealistic, since the main constraint that many of them, especially BMOs

and NGOs, face is a lack of funds, and often they do not understand that DFID M4P programmes,

unlike those of some other donors, cannot provide general subsidies to such organisations, though

they can fund specific activities.

Nevertheless, many beneficiary organisations report disappointment with the lack of follow-up from

Essor and, especially, their perception that Essor prefers to conduct diagnostic studies rather than

practical implementation of reforms. In Goma, for example, the A2C workstream initially made

contact with COPEMECO (the Confédération des Petites et Moyennes Entreprises du Congo) in

May 2016, but the partnership with the organisation has not yet been finalised. The A2C workstream

has been working with FENAPEC (Fédération Nationale des Artisans et Petites Entreprises du

Congo) in Goma for the past year, but FENAPEC has expressed frustration that Essor has not

accepted any of the activities/projects they have proposed, in part because Essor insists that any

new activity must be preceded by a diagnostic study.

With the exception of the AC workstream, which has pursued a deliberate bottom-up approach,

working with a wide range of private sector and civil society groups, there is little evidence that the

other workstreams have selected and designed their interventions in close consultation with the

intended private sector beneficiaries. If they are not anchored in deep and broad-based private

sector participation, any reforms that Essor does produce may not be sustainable beyond the life of

the project.

52 Discussion of Goldberg Study cited in Speakman, John and Rysova, Annoula. 2015. The Small Entrepreneur in Fragile and Conflict-Affected Situations. Directions in Development – Private Sector Development;. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/


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It is striking that Essor has had none of its technical staff working in counterpart

organisations, though this may be changing in the A2E workstream, where UCM, the counterpart

organisation has demanded this as a sign of serious engagement and where the project manager

has begun to spend an increasing portion of his time working from the UCM offices.53 The original

intention, as mentioned above, was to deploy experts to work in the Central Bank and CPCAI.

CPCAI, of course, was dissolved, and no Essor expert was ever placed in the Central Bank, possibly

because of a year-long delay in securing a signed MOU.

In an environment like DRC, it can be exceptionally difficult to effect sustainable change, which in

general requires far more than changes in laws or regulations, but must also entail adoption of new

procedures, changes in behaviour, and development of capacity. It is hard enough to accomplish

this with a full-time presence in a counterpart organisation, and nearly impossible to do so through

part-time, temporary interventions.

GIZ, for example, which is working with the Central Bank on financial inclusion and financial

education, has an office in the Central Bank, staffed by several international and local employees.

This is a common pattern not only for GIZ and not only for DRC, but for donor-funded programmes

in most countries, where long-term expert advisers are placed within government organisations.

The lack of appropriate processes for partner relationship management made it hard for Essor to

adapt to the absorption of CPCAI by ANAPI by establishing a stronger working relationship with the

latter (or, alternatively, choosing to work with a different partner if an evaluation called into question

ANAPI's suitability as a partner).

C.2.4 How effectively is Essor coordinating with ÉLAN to enhance performance and achieve results? [joint EQ with ÉLAN]

Although it is understood that there is regular communication between the two projects there

is little evidence that this has led to effective joint action in spite of the substantial overlap in

sectors and thematic areas in which the two projects operate. There have been some

instances of effective cooperation, such as on the coffee export tax. However, otherwise

ÉLAN has launched market systems interventions without BER constraints having been

addressed.

Essor management have spoken of regular communication and coordination with the ÉLAN project,

with substantial overlap in the sectors and thematic areas in which the two projects operate. Both

projects are active in access to finance, agricultural value chains, and access to electricity. There

have been some isolated instances of cooperation, for example on the coffee export tax, and there

has been discussion between the two workstreams on their leasing initiatives. Given the

observations of the ÉLAN MTE Evaluation ('it is clear that a number of interventions would have very

much broader and more sustainable – and possibly deeper – impact if enterprise behaviour change

was supported by broader regulatory change'), closer collaboration and joint design efforts would

yield improved benefits.

C.2.5 Does Essor have the capacity and organisational arrangements to implement workstreams and their interventions?

At the time of the MTE Essor did not have adequate capacity and organisational arrangements to

implement the project. The main problem for Essor has been the lack of a senior full-time project

manager to steer the project, adapt programming to evolving opportunities and challenges within a

complex and fragile environment and ensure strategic and operational coordination amongst project

53 Interview with a key informant in UCM.


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workstreams. Essor also lacked a functioning MRM system for the first half of the project and had

no systematic procedures and processes to adapt programming and apply resources.

a. Management capacity

The first Annual Review of Essor, completed in February 2016, noted that, apart from the OHADA

workstream, which was 'making strong progress', the remainder of the programme 'has been too

slow to launch concrete action'. Having given it a grade of C, DFID put Essor on a performance

improvement plan (PIP). The following year the programme received an A and last year the

programme went back to a B and is back on a PIP. The 2017 Annual Review for Essor found that

there has been a lack of substantive progress on key outputs and outcomes, as well as limited

implementation of the strategic recommendations of the 2017 Annual Review.

As a project working on BER in a country with endemic corruption and a central government that in

many instances lacks the political will to undertake reforms, Essor faces many challenges and yet

Essor has achieved substantial delivery by OHADA and promising results in the A2E workstream

(see Technical Annexes). In our opinion, however, Essor has made less progress towards

achievement of concrete results than would be expected of a project of this size 2½ years since

inception.

We believe that Essor has suffered from inconsistent management since its inception. There has

been a high turnover of senior management personnel and of technical leads and project managers

in individual workstreams. Management and organisational systems and processes are described at

length in the Essor inception report, but weak implementation has impeded the project team's ability

to design and implement effective interventions.

With the exception of the OHADA workstream, Essor interventions have been slow to launch and

are underperforming (see Technical Annexes and Annual Review). The February 2016 Annual

Review, covering the first year of the project, attributed some of this to unforeseen changes in the

political environment. The CPCAI (Comité de Pilotage pour l'amélioration du Climat des Affaires et

des Investissements), which was to be Essor's main central government interlocutor, was dissolved

during 2015. DFID DRC spending during FY 2015/16 was also reduced, and Essor was given

instructions to 'go slowly' on the portfolio outside of the OHADA project. It took far longer than

expected for some workstreams to obtain signed memoranda of understanding (conventions

d'assistance technique) with their government counterparts. As a result, many of the workstreams

were not approved until the mid- to late 2016, and intervention teams were not recruited and

mobilised until the workstreams had been approved. As the Annual Review observed, 'The business

case process did not deliver an opening portfolio of fundable projects. Particularly disappointing was

that rapid impact activities have been insufficiently utilised and where they have been launched have

been too slow and with limited impact.'

It is no accident that OHADA and Anti-corruption, the two workstreams that have made the most

progress, are those whose technical leads were already resident in DRC and who were involved in

Essor since inception. Other workstreams have suffered from turnover in technical leads or project

managers or from personnel who are not resident in DRC and who do not work full-time on the

project.

Overall project management has been beset by similar problems. There have been three Team

Leads since inception, two of whom have been part-time and one of whom has not been resident in-

country (and who also does not speak French).


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b. Organisational arrangements

Adaptive Management facilities require management which can adjust programming midstream in

response to emerging opportunities and challenges. A recent brief on Adaptive Facilities found that

management and oversight of such programmes are labour intensive, and require adequate

investment, appropriate skills and a mix of technical, political and operational skills to facilitate

reallocation of resources amongst interventions when required.54 The MTE evaluators contend that

PwC made substantial investment in the management and technical capacities of workstream and

intervention teams, but not in overarching project management, and this inhibited Essor’s ability to

respond to emerging challenges and opportunities in an adaptive fashion.

In its inception report, PwC outlined project organisation as follows:

• 'The project level: each project team will have its own governance structure. Typically, there will be a team leader or project manager who will be held to account by more senior colleagues providing a layer of quality assurance. Key risks or issues at a project level will be escalated to the PMU (Programme Management Unit); and

• 'The Essor Programme Management Unit (PMU) level: the PMU will monitor progress, deal with escalated issues and risks and escalate these further to DFID where appropriate. It will also be responsible for managing the broader alliance brought together to implement Essor.'

In the event, the decision to endow each project team with its own governance structure appears to

have led to creation of silos, with little in the way of collaboration or coordination among the different

workstreams. This is compounded by the lack of effective project-wide management. The Essor

PMU exists but participation in its deliberations, according to Essor senior management, is limited to

senior management of the project and the M&E team, and does not include the workstream technical

and project leaders.

In mid-2017, PwC, in the wake of numerous personnel changes, sought to clarify Essor leadership

roles and responsibilities, dividing them between a Strategic Lead (a Partner in PwC DRC) and a

Team Lead. The document in which these were outlined also referred to a Project Lead, but there

was no indication what that role consisted of or who was meant to fill it. The Strategic Lead and

Team Lead both were, and remain, part-time positions, and the Team Lead is not resident in

Kinshasa. The following table illustrates the planned division of responsibility and accountability

between these two positions.

Table 5 Essor Senior Management Team Roles, Responsibilities, and Accountability

Role Accountability

Responsibility

TL Strategic Director

Team Management GD TJT

Programme Reporting to DFID TJT

Review of deliverables (Workstreams) GD TJT GD

Monitoring and Evaluation TJT TJT GD

Stakeholder Engagement GD TJT GD

External Communications GD TJT GD

Internal communications TJT TJT GD

DFID KSM JL TJT GD

DFID Contract Management JL

Source: 'Essor Team Leadership Roles', 25.07.17.

54 Donovan and Manuel (2017) Adaptive Programming and Business Environment Reform – Lessons for DFID Zimbabwe, ERF, April.


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It is hard to imagine how this could work even under ideal circumstances, given that senior staff

members in different roles may have responsibility without accountability or accountability without

responsibility, and that there is considerable overlap between the two sets of roles and

responsibilities. Also, the TL is given primary responsibility for M&E and reporting, even though

Market Share Associates, a member of the PwC-led consortium, possesses the expertise in this

field.

C.3 Value for Money (Efficiency): Is Essor likely to deliver value for money?

Overall the project is unlikely to deliver value for money on its current trajectory. Only two

workstreams (OHADA and A2E) have made reasonable progress, while all others have either

already closed down or do not yet have compelling evidence to suggest they are on track to deliver

any impact. There are major weaknesses with the management of the project despite this

representing around one third of the project's costs. For the OHADA and A2E workstreams, the

nature of potential benefits needs to be more rigorously set out to allow a more evidence-based

judgement of the extent to which these specific interventions might be achieving VFM.

C.3.1 How appropriate is the Essor VFM framework?

Overall Essor's VFM framework requires some modifications to be more relevant to both

guiding and holding to account project implementation. Most important at this stage of the

project, however, is simply that data is consistently reported against the indicators, so

progress can be meaningfully assessed.

Essor's VFM framework was first developed in full in December 2016, and was reported on for the

first time in February 2017. An updated draft of the VFM framework was developed in September

2017 following significant changes to the Essor logframe finalised in August 2017.

To date there has been no reporting on the current VFM framework and only limited reporting

(focused at the Economy level) on the previous framework. This is linked to both the late

development of the initial framework (two years after project start) and the lack of availability of data

at the efficiency and effectiveness level, despite the February 2017 framework committing to

reporting on various indicators on a quarterly basis. Given this, it is only possible at this point to

assess the framework in theoretical terms – a better assessment can be made once it is first reported

against in full, which should be possible as part of the 2018 Annual Review.

The VFM framework has the following strengths:

• The Economy indicators are (in theory55) equivalent to those reported on by ÉLAN and the DSU, which should allow for simple cross-project comparisons;

• The framework is consistent with the logframe which should reduce the data reporting burden;56 and

• The framework covers all categories of Economy, Efficiency, Effectiveness and Equity.

However, the framework has the following potential weaknesses:

55 In practice reporting to date has not been consistent. 56 Although equally tracking the logframe too closely can be a weakness too. With the update of the logframe in August 2017 a couple of good VFM indicators were taken out of the framework as they no longer directly linked to logframe indicators. This is despite the fact that these indicators still give critical and useful information relative to assessing VFM (notably the indicator for the proportion of reviewed/drafted policies/procedures that are adopted and in turn the proportion of those that are adopted that are implemented).


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• Lack of reporting on indicators to date could suggest that the reporting burden is too high relative to other priorities within the project. A more focused framework might enable more regular reporting. Notably, reporting of the most important indicators should be quarterly rather than annual, to allow for implementation to more quickly adapt.

• No information is provided in terms of what level of achievement should be expected for each indicator (i.e. how to determine if performance is weak or strong).

• The previously included indicator for leverage of government resources has been dropped, apparently because the project is not targeting this (and indeed the last VFM report stated achievement as £0). This seems perverse given that government commitment is critical for continued progress on reform efforts and targeting government contribution to such reform efforts is surely part of this.57 The OHADA workstream provides a good example, where the ongoing costs of running the GUCE will at some point have to be funded by the GUCE itself. Even a qualitative assessment of government investment into a reform area would provide highly valuable information. This could include in-kind investment such as staff time (not including time effectively remunerated by the project through per diems or other motivation payments), or indeed progress of agencies in raising their own revenues for running costs.

• The previously included indicator for the proportion of reviewed or drafted policies/procedures

that are actually adopted in practice has been dropped, despite the weak performance

against this indicator in 2016 and the clear relevance of the information for assessing whether

Essor's activities are efficiently targeted.

• The Equity indicators are direct duplications of what is already reported in the logframe.

Likewise, the second Effectiveness indicator is a direct replication of what is already reported

in the logframe. They do not provide any additional information.

• A new category called 'Sustainability' has been added. Separating this category from the

previous structure of the VFM framework is not logically consistent as achieving sustained

results is part of Effectiveness.

• There is no information about what qualitative analysis will complement the indicator

reporting.58 Given the nature of the project with many hard-to-capture results, the qualitative

analysis will be particularly important.

• The only previous reporting there has been on the framework did not focus sufficiently on

what the implications of the analysis might be, i.e. how should implementation adapt as a

result of the findings?

C.3.2 How effectively is the Essor VFM framework used to inform project management?

Given that the project's VFM framework was not fully developed until early 2017 and reporting

against it has been limited beyond the Economy level (i.e. cost of inputs), it is clear that it has

not been a key driver of project decision making. That is not to say that the principles of VFM

have not been followed during project implementation, but the lack of structure to monitor

the adoption of these principles has restricted their potential influence in improving overall

management decisions.

At the Economy level VFM indicators have been reported on regularly, which has provided a clear

basis for managing performance against them. However, achieving good Economy does not

necessarily mean a project is achieving good VFM. There is a risk that this lack of balance in VFM

reporting could have adversely affected overall VFM performance if implementation choices were

57 The new logframe indicator which counts the number of government stakeholders that have 'demonstrated commitment to reform' is a relevant complement to this. However, on its own it is unlikely to provide sufficiently detailed information about what concrete commitment has been made. 58 Although there is a statement that there will be qualitative analysis.


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excessively focused on reducing the costs of inputs rather than a consideration of the costs required

to achieve a strong overall impact. The extent to which this distortion may have happened is not

clear, but the project's challenges with ensuring high quality strategic management as set out

elsewhere in this evaluation suggest it might be a relevant concern.

The nature of Essor is that key decision making is made both at the workstream level and the

centralised Senior Management Team. There is considerable scope for improving the ownership

and understanding of VFM issues specifically at the workstream levels. The lack of workstream-

specific VFM reporting has contributed to this.59 Monitoring and reporting on VFM has also been

highly centralised, with what seems to have been a mixture of remote and Kinshasa-based

involvement from only the project's finance team and more recently the MRM team. There is not

obviously a VFM champion for the project, i.e. someone whose role is to drive VFM performance

across the project in the same way that a gender lead might do for gender issues.

C.3.3 To what extent is Essor on track to deliver value for money?

Overall the project appears to be substantially off track to deliver VFM. Essor has made slow

progress since it began in January 2015, as set out elsewhere in this evaluation. Although

there has been some acceleration of activity in the last year, and the OHADA workstream has

broadly met original expectations, the project overall remains clearly behind originally

intended timelines.

Until the very recent work on impact modelling (started in Q3 of 2017), there had been very limited

articulation as to what tangible impact specific activities were trying to achieve. Modelling of potential

impact has now been established but remains under development at the time of this evaluation and

has been heavily focused on what can be quantitatively measured. The underlying assumptions

used to monetise projected impact are sometimes highly questionable. There is insufficient

consideration of the more difficult-to-quantify aspects of impact that may well provide the core VFM

justification for the project.

Compelling justifications for why specific workstreams will be effective are often absent from project

documentation and the present evaluation has highlighted concerns about the realism of critical

project theory of change assumptions. The lack of quality of existing project data further undermines

confidence that sufficient progress has been made to this point. Nevertheless, it is to the project's

credit that considerable effort has been made in the second half of 2017 to resolve this data issue,

potentially allowing for a clearer picture of progress towards impact in 2018.

C.4 Progress Towards Results (Effectiveness): To what extent is Essor likely to deliver an improved business environment?

Essor is likely to deliver some improvements in DRC's business environment. These include

reduction in the time and cost of business registration and increased access to finance through

creation of a collateral registry (OHADA); creation of a framework for public–private partnerships in

renewable energy systems (A2E); reduction in the coffee export tax (AVC); and, potentially,

reduction in corrupt practices at a key border crossing (AC), and reduction of the multiplicity of local

government taxes and fees (MSME).

59 Although there are now efforts to address this with the July–September 2017 quarterly report annex adding a section on VFM for each workstream (in the draft that was made available information was only entered for OHADA, however).


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C.4.1 To what extent are Essor workstreams and interventions effectively targeting the most relevant constraints? [Relevance]

The Essor workstreams are broadly targeting the relevant constraints. An Essor survey of

900 MSMEs found that access to finance and electricity were the most pressing concerns of

enterprises.

However, the interventions could be more effectively targeted by (a) closer engagement with the

private sector (only the AC workstream has involved the design of interventions in close consultation

with intended private sector beneficiaries); and (b) closer collaboration with ÉLAN on addressing the

market failures within the finance and electricity sectors.

The A2F workstream illustrates the point. Access to finance was mentioned by respondents to the

Essor MSME survey as the second-most serious constraint they face, after access to electricity. The

financial education intervention can potentially be very useful to MSMEs in that it teaches basic

financial concepts which, correctly applied, can help small businesses access capital. Leasing shows

promise – the new Leasing Law was passed in 2015 and accompanying regulations have yet to be

drafted in and approved. Inclusive insurance (as discussed in the Technical Annexes) is likely to be

of limited success.

The OHADA workstream, which is supporting the RCCM in the creation of a register of assets

pledged as collateral, may actually respond more than A2F to businesses' need for better access to

financial services, as could, potentially, the MSME taxation workstream, which seeks to support an

electronic payment system for MSMEs' transactions with government.

The A2E workstream could have been more effective had it put more of its resources into financial

education for MSMEs, which would increase their ability to approach financial institutions, and

collaborate with ÉLAN, whose A2F workstream focused on delivering branchless mobile banking

services to consumers.60 These issues are discussed in detail in the Technical Annex.

The selection of Essor workstreams and interventions was based to a large extent on the

World Bank Doing Business (DB) indicators. DFID's business case for the Essor 'flexible facility'

specified that success would be measured using the DB 'Distance to Frontier' indicator, which is

meant to assess the level of regulatory performance in a country over time. Specifically, it measures

a country's business regulations relative to the globally most efficient regulatory regime (known as

the frontier) in the DB sample since 2005. The indicator covers all ten DB measures and provides a

given country with a number between 0 and 100 (100 being the frontier). The Essor business case

stated that the project's success would be judged by its 'ability to move the DRC's "Distance to

Frontier" score from 35 to 52.'

However, using DB alone has been shown to be a poor measure of identifying key constraints; for

example, as noted elsewhere in this document, DB issues are rarely flagged as key constraints in

Enterprise Surveys (Heatherington, 2017). This is problematic for three reasons:

1. The 2008 independent review of the World Bank doing business indicators observed that 'DB

is not intended to, and cannot, capture country nuances. Firms' investment decisions also

depend on variables not measured by the DB Indicators, such as the cost and access to

finance and infrastructure, labour skills, and corruption.'

60 Interviews with UNCDF, GiZ and Central Bank of Congo.


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DFID's own analysis supports this: 'Although the use of DB indicators to advertise a country as a

destination for FDI is perfectly legitimate … the DB indicators are poorly suited to prioritising reform

or measuring the outcome of a donor programme' (Heatherington, 2017).

2. The indicators were developed based on the notion that a country's business environment is

related to firm performance. However, the relationship between firm performance and

macroeconomic outcomes (and thus, the relationship between the Indicators and

macroeconomic performance) is a controversial topic in the literature. In the DRC, some

indicators, such as protection of minority investors and closing a business are largely

irrelevant, while other important elements of the business environment, such as corruption,

are not covered.

3. This gap between the indicators and the genuine obstacles that businesses face in DRC is

compounded by Essor's focus on MSMEs. Construction permits, for example, an Essor

workstream that was abandoned when it was confronted by an irreconcilable conflict between

national and subnational authority, are of minimal concern to most MSMEs, which lack the

motivation and means to build their own business premises and instead operate from rented

facilities or on the roadside.

C.4.2 To what extent are the logic and assumptions linking interventions to intended results valid and being borne out in practice? [Relevance]

It is too early to tell whether or not the interventions are generating the targeted impacts. Whilst

progress against milestones was reported as over-achieved at Annual Review (output 3.2), the data

verification exercise found low confidence in the results of this indicator. This evaluation has found

that only two out of the five evaluations have made significant progress (OHADA and A2E).

C.4.3 To what extent are interventions within workstreams meeting implementation milestones and targets?

While progress against milestones was reported as over-achieved at Annual Review (output 3.2),

the data verification exercise found low confidence in the results of this indicator.

At Annual Review, six out of 14 interventions were reported as achieving more than 70% of their

milestone targets: Leasing Reform, Reduction in taxation for MSMEs, Improvement in public Sector

Support to the Coffee Industry; Improvement in A2E for MSMEs all achieved 100% of their milestone

targets; reducing the financial and admin burden of MSMEs achieved 90% of their targets; Support

to development of an Inclusive financial policy received 72%. The other eight interventions achieved

less than 8%.

When averaged, the overall score was 75% vs a target of 70% but the data verification exercise

found low confidence in this indicator.

C.4.4 To what extent are interventions already prompting changes in the business environment? [Relevance]

The OHADA workstream has contributed to an improvement in DRC’s Doing Business ranking for

establishing a business, but the potential impact, if any, that might result from this is not yet clear.

None of the workstreams have yet produced measurable impacts. This is not unusual for a BER

programme at the beginning of its fourth year of operation, since reforms, even if successfully

implemented, can take a long time to generate measurable improvements in economic performance,

increased household incomes, or similar impact indicators. It is therefore essential for BER


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programmes like Essor to present a compelling logic for their interventions and to chart a plausible

route towards achievement of their expected impacts. Essor has not done either of these.

'Be cautious in projecting results: results will be backloaded – an 8-year programme should

deliver a large majority of its reforms in the final 3 years – so be careful not to overpromise at

mid-point. Other factors will change the business environment during the project, sometimes for

the worse. In addition, 'attributing impact and outcomes proves to be more difficult than often

anticipated in [business cases]'.61

a) Are public sector actors acting to address business environment constraints because

of Essor interventions?

There is substantial evidence of this in several workstreams, including A2E, OHADA, and AVC, and

some evidence in other workstreams. Overall, however, the achievements have not attained the

levels targeted in the MRM.

Essor has an indicator which measures the commitment of institutions to implement activities as a

result of Essor interventions, but the report data were assessed as being of low confidence. This

indicator 3.1 is defined as demonstrated commitment by government institutions: evidenced by (a)

a written agreement or MOU to collaborate with Essor, (b) establishment of a working group with a

mandate to investigate and reform, (c) a reform roadmap / action plan / work plan outlining activities

that will permit reforms, or (d) allocation of resources to support the reform process. In the Annual

Review insufficient evidence was provided of the comparison of budget/action plans before and after

Essor interventions. Ten achievements were reported (which exceed the Essor target), even though

none actually met all the logframe criteria.

b) Are new processes and procedures to address business environment constraints

being implemented and enforced because of Essor interventions?

There are many new processes and procedures, which address business environment

constraints, being implemented with Essor support. These include:

• Outcomes such as simplified business registration, digitization of business records, and improvements in the functioning of commercial courts (OHADA);

• Reduction in the coffee export tax (AVC);

• Some improvements in the regulatory environment for insurance and leasing (A2F); and

• Selection of sites for solar mini-grids and progress on establishing the legal, commercial, and financial basis for their development.

c) Are poor producers and women accessing opportunities that arise from an improved

business environment?

There is no evidence that poor producers and women are accessing these opportunities.

Essor has three outcome indicators that measure this result:

Indicator 3 (Essor): Cumulative number of procedural changes, additions, or removals that reduce time and/or costs for MSMEs and that are supported by Essor.

61 Heatherington (2017) 'Business Environment Reform Facility: What Works in Business Environment Reform in Sub-Saharan Africa and South Asia', DFID Business Environment Reform Facility, February.


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Indicator 4 (Essor): Cumulative number of BER policy / regulatory / legislative / administrative changes made or prevented that directly benefit businesses and that are supported by Essor.

Indicator 5 (Essor): Percentage of businesses in areas and sectors targeted by Essor reporting an improvement in the business environment.

Indicator 5 is an annual survey (starting in 2017) of MSMEs to measure their perception of the

improvement in the business environment, but Essor has yet to complete. For the other two

indicators the most recent Annual Review determined that Essor is not achieving these outcomes

since their reported results did not meet the standards of the logframe definitions.

C.4.5 Are there any unintended consequences resulting from Essor's interventions?

The MTE has not identified any unintended consequences.

C.5 Is Essor's measurement and reporting system appropriate to improve implementation?

The Essor MRM system has not been appropriate or effective for improving implementation. A

functional MRM system was not in place until the end of 2017. The verification exercise found serious

weaknesses with the initial quality of the system such that there was low confidence that reported

results reflect reality for the majority of indicators.62

C.5.1 Does the logframe facilitate adaptive management of Essor?

The logframe facilitates adaptive management to a limited extent as the impact and outcome

indicators are mostly common to different interventions, with progress of the individual workstreams

measured by the achievement of milestone results and delivery of interim impacts and outcomes.

Where the logframe has weaknesses is comparing achievement across the different workstreams

to enable readjustment of resources based on traction of the different workstreams. NAIC cannot be

attributed to specific Essor interventions with reliability. The logframe/ MRM is more accurate in its

attribution of output and outcome indicators; however, the most recent Annual Review criticised the

use of these indicators as a measure of success precisely because they do not provide any

meaningful gauge of success and eventual impact, and therefore cannot facilitate adaptive

management.

Typical characteristics of logframes in adaptive programmes like that envisioned for the Essor

Facility include: use of a high-level 'framework' logframe supplemented by more detailed 'nested'

logframes; 'harvesting' results retrospectively; a portfolio or 'basket' approach to outputs; and the

use of process-related outputs focused on learning and adaptive management. Logframes should

be viewed as active management tools which are frequently changed and updated.63

Does the logframe allow for flexibility in adjusting implementation, closing-out or replacing

interventions and workstreams?

62 The verification exercise conducted on the recently adopted MRM system rated over two-thirds of its indicators 'red' (i.e. low confidence that reported results accurately reflect reality) and the remainder 'amber' (i.e. medium confidence) which indicates that the quality of the results needs to be strengthened before the MRM can be used as an effective monitoring tool. 63 Donovan and Manuel (2017) Adaptive Programming and Business Environment Reform – Lessons for DFID Zimbabwe, ERF, April.


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Yes – as far as we are aware there is potential to modify the logframe as the project develops,

and add additional interventions and workstreams.

The theory of change identifies the following intervention logic for the programme:

To function as this type of tool the logframe would need to identify at what point of the theory of

change the intervention was at, i.e. problem identification, solution design, development of laws/

regulations, development of G2B capacity, implementation of laws or regulations, change felt by

MSMEs. The logframe could then be used to track the appropriate adaptation needed for each state

of the intervention.

This is time-consuming but is possible to develop. It is difficult to see why it is needed, as the

workstream leader should be capable of identifying the right adaptation for the specific intervention

and their skill will be judged on the achievement of project results.

C.5.2 To what extent does the logframe provide Essor with a framework for comprehensively tracking how workstream interventions contribute to project results?

The logframe does not track how workstream interventions contribute to project results and

there is no system that the MTE team could identify to compare achievement across the

workstreams and monitor intervention progress.

There are shared impacts, and a number of learning outcomes and outputs which are aggregated

across the different programmes. However, this approach may make it difficult to monitor the

progress of the interventions and their contribution to the success of outputs and outcomes, which

are also important to an adaptive facility.

The output 3.3 which measures achievement of targets for each intervention in the last quarter is a

reasonable measure of short-term planning but does not really measure the traction of the

interventions.

PwC

Theory of change

2

If GoDRC identifies and prioritises relevant

Reform for MSMEs, and

Improves the legislative framework

for those reforms, and

Improves processes and operating

framework to enact the legislation, and

Improves its capacity to deliver the services

& inform businesses of their availability , then

Support Government to engage with private sector organisations through

consultations and PPD (Project Level and Workstream Level)

Support Government to review, draft and adopt improved legislation to

enact the priority reforms.

Support Government to review, draft and adopt new operational

frameworks to deliver better services to businesses.

Build the capacity of Government to deliver services that are more transparent, cost-effective, accessible and equitable and inform businesses that these services are available and how to access them

Business will receive more cost-effective, accessible, equitable and reliable services from GoDRC, removing

obstacles to investors and decreasing costs

What Essor will do:

As a result of these changes, there is an improved business climate that fosters economic opportunities for poor people, with a focus on MSMEs and women. Demonstrated by:

• Savings in time and costs to businesses measured by selected indicators

• Perceptions of Essor’s target MSMEs on reduced obstacles and costs.

• Links to job creation, incomes, improved justice and poverty reduction INCOME GENERATION, JOB CREATION

POVERTY REDUCTION


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The programme needs to be able to compare and track progress for each workstream. One option is for the team to develop nested logframes, using similar outcomes and impact indicators, which can be aggregated, as now, to track outputs and outcomes across the programme and within the workstreams.

C.5.3 To what extent does the MRM system contribute to learning and improving project performance?

The MRM system does not contribute much to learning and improving project performance. There

are embedded logframes which track performance of each workstream but at the time of the MTE

these had not been implemented.

Does the MRM system provide Essor with a management tool that supports the project as an

adaptive facility?

The MRM was adopted less than a month before the MTE was completed, so it is too early to assess

this. The MRM as demonstrated to the evaluators was based on Microsoft Excel, with supporting

documentation (pdf and Word files, images, and spreadsheets) held separately in a shared Dropbox

folder. The difficulty of navigation of this system limits its utility as a management tool. Essor is

apparently in the process of migrating the MRM from Excel to an SQL database, which should make

it easier to generate real-time reports that would facilitate adaptive management of the project.

Does the MRM system reflect intervention level performance and its contribution to project

results?

The Data Verification exercise indicated low confidence in the accuracy of the data being collected

by the monitoring and results management system. The system is new, having been approved by

DFID in December 2017, and so therefore it may take some time to iron out data collection and

quality issues. Currently the MRM as it stands is not accurately measuring project performance.

The Data Verification Exercise completed in December 2017 showed:

'confidence ratings for Essor's 16 assessed indicators (from a total of 25 indicators, of which

16 have reported results) were as follows: five were rated with amber 'medium' ratings, and

eleven with red 'low' ratings. The share of these ratings is spread fairly evenly across the

assessed logframe levels, where outcomes include one amber and one red, intermediate

outcomes include one amber and one red, and outputs include three ambers and nine reds.

The low 'red' ratings tended to stem from low ratings on criteria relating to the clear and

transparent calculation of results (see criteria C.1 and C.6), documented consistency of data

collection approaches applied across workstreams (see criterion B.6 and B.7), as well as the

general comprehensiveness of substantiating evidence for all reported results (criterion C.3).

The results themselves that Essor reports are not particularly complex (indicated by the fact

that they required the directly measured results criteria, rather than those of modelled

results), and it is therefore the verification team's view that many of the low rated indicators

can be fairly readily improved by ensuring that the aggregation calculations (C.6) are more

explicit and that each reported result is substantiated with clear evidence.'

'The nascent level of development of the MRM system has implications for the credibility of

the results and the system as a whole in its current form. Essor is reporting results from three

years of implementation against a recently approved logframe (September 2017) with an

MRM system that has just been established. We believe that the result of this shows in the

form of the frequent low confidence ratings given to Essor's indicators in this assessment,

where there remain gaps in the provision of evidence for results, the way that reported results


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are linked to supporting evidence within the MRM system, plus the likely challenge of ex-post

compilation of evidence and results against a recently approved logframe.'

The indicators and their rationale

It is not yet possible to assess the effectiveness of Essor's new MRM in capturing, measuring and

reporting results. It is, however, possible to evaluate the indicators in the Essor logframe, which went

through several iterations before being finalised in September 2017. The logframe has based its

impact assessment on two indicators: 1) NAIC; and 2) Cumulative number of companies

experiencing net positive income change, as a result of Essor-supported business environment

reforms, disaggregated to show cumulative number of MSMEs

a. NAIC

The use of NAIC as a primary impact indicator is attractive to DFID partly because of the ability of

this indicator to compare the impacts of different projects.

The use of NAIC seems to represent an improvement over the traditional time and cost savings

indicator used for many BER programmes; in theory it also measures benefits that flow to wage

earners as a result of any improvements. However, the logframe defines the indicator narrowly to

represent time and cost savings related to compliance with regulation, and so this will only measure

the impact of interventions related to administrative streamlining or anti-corruption and not (for

example) measure improved enforcement of regulation or the provision of new regulation, which

enables market investment and growth (which may increase the administrative burden).64

In addition, there are many factors that influence the relationship between BER and increased pro-

poor incomes, and it would be useful to triangulate the interventions to see if one had led to the

other. The NAIC is likely to be of limited use, by itself, in measuring the true impact of Essor on

poverty and MSME growth.

b. Cumulative number of companies experiencing positive net income change

This impact indicator is calculated by summing up, across all workstreams, the cumulative number

of companies whose income increases as a result of business environment reforms that Essor has

supported. It is a complement to the NAIC calculation, which itself is an extrapolation, from survey

data, of both the number of companies whose income increases and the average scale of the

increase.

c. Attribution

The Essor team have recognised the challenges of attribution – that is, how to establish the extent

to which an observable change in an indicator can be attributed to a specific intervention. Essor has,

consequently, adopted different approaches for each workstream or intervention. The explanatory

notes to the logframe describe them as follows:

• A2E: Attribution to be assessed using a matching approach that compares businesses located in the three sites selected for electricity development with others located in up to three of the potential sites evaluated but not selected. Beneficiary businesses to be matched with similar non-beneficiary businesses. The respondents will be compared in terms of their comparative change

64 As discussed in the A2E case study, for example, the NAIC indicator is based on the businesses' savings from a switch from costly diesel fuel to less expensive solar energy, but this fails to capture the benefits from attraction of investment that would not occur if the solar PV installations were not built, together with the jobs creation, income growth and distribution, and productivity increases that reliable and cost-effective electricity supply would promote.


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in income to generate impact indicators 1 and 2. The approach described in intermediate impact indicator 265 will ensure that the electricity development in the three sites that are developed is attributable to Essor.

• A2F: A rigorous, methodologically defensible approach to estimating the NAIC generated from companies accessing insurance and leasing markets is still to be developed in collaboration with ÉLAN, which is also engaging in these markets. The approach described in intermediate impact indicator 366 will ensure that the businesses using leasing and insurance policies can be attributed to Essor.

• Anti-corruption: A baseline survey to be conducted before beginning anti-corruption activities, as a basis for comparison via subsequent surveys to determine changes in amount or frequency of illicit payments, and to ask respondents to what they attribute these changes. If feasible, Essor plans to conduct surveys with comparable groups of MSMEs located in places where Essor has not conducted anti-corruption activities to estimate the change attributable to Essor. Also, the anti-corruption workstream could potentially increase tax revenues for Government, and Essor plans to explore the possibility of quantifying this benefit.

• MSME: Essor plans to use a before/after comparison via surveys to determine changes in the time and cost required for paying specific fees, and the extent to which respondents are still required to make illicit payments. The surveys will also gather information from respondents about how they attribute changes in the level of tax payments. If feasible, Essor plans to conduct surveys with comparable groups in places where Essor has not conducted awareness activities on the tax typology, to estimate the change attributable to Essor. The surveys will also assess how companies learned about the official guidance on fee payments, to assess whether any changes in behaviour were due to Essor's efforts. Also, the MSME workstream could potentially increase tax revenues for Government, and Essor plans to explore the possibility of quantifying this benefit.

• AVC: AVC interventions have concentrated on reducing export taxes on coffee exports imposed by ONC. The benefit to businesses can be estimated by calculating the reduction of the tax per kilogram multiplied by the number of kilograms of coffee exported officially. Essor plans to determine attribution of these changes through stakeholder surveys. To disaggregate the amount of the export tax reduction transferred to MSMEs, most of whom are coffee farmers but not exporters, Essor plans to calculate the average proportion of the export price received by exporters that is paid to coffee farmers, and any changes in that proportion before and after the tax reduction, adjusting for seasonal changes in coffee prices. This will not solve the problem of attribution, however, since this is an intervention in which both ÉLAN and Essor participated.

• OHADA: For the OHADA RCCM intervention, Essor plans to conduct a study in which businesses attempt to register using both the traditional approach and the GUCE one-stop shop to compare the differences in time, cost, and bribery requests experienced. These comparisons may take place in the same location if both mechanisms are available; otherwise, a study will be done in each place where the GUCE is about to be introduced to compare the time and cost under each system and quantify the additional savings. 'This will clearly demonstrate the improvement of the new process supported by Essor with the traditional business registration process.

These approaches, though they are intelligently designed to measure real change, do not fully

address the problem of attribution. Several of the workstreams, notably A2E, A2F, and AVC, involve

overlap or active collaboration with other donors or projects: A2E with the World Bank, USAID, and

the AfDB; A2F with UNCDF and GIZ (A2F plays a supporting role to GIZ in the financial education

intervention); and AVC with ÉLAN and, to some degree, with USAID.

65 Intermediate impact indicator 2 is 'newly installed capacity (MW) in the renewable electricity sector in DRC influenced by Essor'. 66 Intermediate impact indicator 3 is 'Cumulative number of businesses using leasing and insurance products'.


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d. Interim Impact Indicators

The two impact indicators in the logframe – cumulative NAIC and cumulative number of companies

experiencing positive NAIC – are aggregated across all workstreams, though in some instances

these are shown in detail in the business cases for individual workstreams.

OHADA: The OHADA results chain for its support to the RCCM business registration system shows

the following impacts:

1. A target cumulative NAIC of £952,019;

2. 1,040 cumulative jobs created; and

3. A reduction of £20 in annual bribes paid by 'entreprenants' (sole proprietors), and 15,482

such beneficiaries, for an annual total of £310,000.

The explanatory notes to the Essor logframe state: 'The best-case scenario [for OHADA] estimates

6,000 new business registrations and 6,000 other transactions across all the GUCEs by 2020, with

a savings of GBP 98 for registering businesses (reduced time and fees) and a cost of GBP 18 for all

other transactions. This would translate to a total benefit of £696,000 over the life of the project.'

The 2016 Essor Financial Report, however, shows an expected annual spend of £679,268 on this

intervention, or about £3.4 million over the project life.

Access to Electricity: The outcome indicator is 'Newly installed capacity (MW) in the renewable

electricity sector in DRC influenced by Essor', and the value of the indicator is 15 MW, which the

logframe indicates will not occur until 2021. The value of the benefit is calculated as 'the notional

reduction of cost in energy provision to the businesses by converting from diesel-fuelled generators

to electricity'.

The outcome indicator for A2E is all-or-nothing. It does not allow for the effects of the underlying

reforms supported by Essor, which may contribute to widespread roll-out of PPPs for solar energy,

though possibly not within the Essor project life, since the transactions may not have concluded by

the end of the project or, if they have concluded, the installations may not yet have been built and

commissioned.

The calculation of the value of the benefit captures only a tiny slice of the potential benefit from the

intervention – the cost savings realised by the small minority of the population that currently uses

diesel generators as they switch to solar power. It ignores the effects on this segment of the

population of the productive investments they might make, and the new jobs and income to which

those investments will contribute. It ignores the benefits, some calculable and some not, accruing to

the much larger population group that will have access to electricity for the first time.

Anti-corruption: The benefits that are assumed to be generated by the anti-corruption workstream

are based on 'savings introduced by the removal of several illegal and duplicated fees and duties

imposed by various state agencies'. This cannot capture the expansion in business activity that could

result from a reduction in corruption, nor does it capture the increased business opportunities and

increased fiscal receipts from companies that can make a different calculation of the relative costs

and benefits of formalisation in an atmosphere of lower corruption.

Agricultural value chains: The logframe benefits for the AVC workstream are based on the savings

achieved due to the reduction of the export levy, imposed by ONC, to 2%, applied to the total tonnage

of formal exports.


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Access to Finance: The estimate of NAIC attributable to A2F assumes that each enterprise that

uses insurance and leasing products as a result of Essor generates an additional £200 in NAIC

annually from profits due to using those financial products. There is no explanation how this estimate

was calculated.

MSME: Here the calculation appears to overstate the potential benefit, since the estimate is based

on the assumption that the 'patente', a lump-sum small business tax, is abolished. Leaving aside the

question of why this is a principal objective of the workstream – in many countries a similar lump

sum tax, at an appropriate rate, can be a fairer and easier way for small businesses and sole

proprietors to pay their taxes – its abolition would not necessarily be a net gain for those who pay

the tax, since it would be replaced by another form of taxation.

The MTE is not covering the design of the final evaluation as this is being addressed in a

separate Approach Paper for the Final Evaluation (encompassing both ÉLAN and Essor).


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Annex D Value for Money

D.1 How can the Essor VFM framework be strengthened?

The following suggestions are made for how the VFM framework could be strengthened:

a) Define what qualitative analysis will be undertaken for each category, providing some sense

(ideally in terms of criteria and standards) for what could be achieved to allow for a comparative

analysis against what is actually achieved;

b) Some sense of quantitative targets should also be provided, particularly at the Efficiency and

Effectiveness levels of the framework, so again there is an ex-ante idea of what good

performance might look like. Setting such targets of course becomes easier once there is a

baseline of data actually reported;

c) Break down the analysis to the workstream level at each level of the framework, in effect creating

mini-VFM frameworks for each workstream.67 This should become more manageable with the

currently planned consolidation of existing workstreams;

d) The impact modelling that has been developed parallel to the existing VFM framework needs to

be integrated as part of the monitoring of effectiveness. The recommendations for improving this

modelling are stated elsewhere in this report;

e) For Equity, focus on a qualitative analysis covering gender, socioeconomic status of beneficiaries

and geography. Again, ensure some ex-ante clarity of what good performance might look like, to

allow for a more rigorous assessment of ex-post achievements;

f) Where reporting is stated as quarterly it should indeed be reported each quarter, so a sense of

indicator trajectory can become clearer;

g) Take out the indicators that are a direct duplication from the logframe;

h) Remove the Sustainability category and put this indicator within the Effectiveness category;

i) Bring back the efficiency indicator on the proportion of policies/procedures reviewed/drafted that

are actually adopted. And ideally track through with an effectiveness indicator for how many of

those that are adopted are actually implemented in practice; and

j) Make a clear statement of commitment to ensure the analysis is focused on what its implications

are for how implementation should adapt in response to the findings.

D.2 To what extent is Essor on track to deliver Value for Money?68

Summary

Overall the project appears to be substantially off track to deliver VFM. Essor has made slow

progress since it began in January 2015, as set out elsewhere in this evaluation. Although there has

been some acceleration of activity in the last year and the OHADA workstream has broadly met

original expectations, the project overall remains clearly behind originally intended timelines.

Until the very recent work on impact modelling (started in Q3 of 2017) there had been very limited

articulation as to what tangible impact specific activities were trying to achieve. Modelling of potential

impact has now been established but remains under development at the time of this evaluation and

has been heavily focused on what can be quantitatively measured. The underlying assumptions

used to monetise projected impact are sometimes highly questionable. There is insufficient

67 The inclusion of VFM sections for each workstream in the Q3 2017 quarterly report annex is a good indication of progress towards this (although the draft shared at the time of the MTE had almost no content for this). 68 The summary of this answer is also presented in the Findings Annex but is repeated here to ensure coherence of the present annex.


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consideration of the more difficult to quantify aspects of impact that may well provide the core VFM

justification for the project.

Compelling justifications for why specific workstreams will be effective are often absent from project

documentation and the present evaluation has highlighted concerns about how realistic critical

project theory of change assumptions are. The lack of quality of existing project data further

undermines confidence that sufficient progress has been made to this point. Nevertheless, it is to

the project's credit that considerable effort has been made in the second half of 2017 to resolve this

data issue, potentially allowing for a clearer picture of progress towards impact in 2018.

Detailed analysis by VFM framework category

The following is an analysis of VFM performance against the categories of the VFM framework:

Economy (i.e. cost of inputs)

Essor seems to have strong systems and processes in place to manage Economy. This is also the

only part of the VFM framework that has been regularly reported on, usually on a quarterly basis

(although only for some of the key indicators). Data on the most informative indicator of daily

personnel cost (fee plus expenses) are available internally within the project management team but

have not been shared in external reports since the 2016 VFM report. This was estimated as £533

per day for 2016,69 significantly above the equivalent cost for ÉLAN of £414.

The trajectory of this indicator is not clear, as it was not reported on in this way before February

2017, nor have updates been included in the quarterly reports. The main reason it sits above ÉLAN's

cost is because of a greater use of international TA providing short-term inputs. On its own this

information is not particularly informative about VFM. There is considerable variety in the personnel

unit costs across workstreams, as noted in the 2016 Annual Review. However, there is no apparent

qualitative analysis as to whether higher personnel costs in some workstreams are justified

compared to others (e.g. because of strength of potential impact or speed of progress).

The project has most consistently reported on cost savings it makes through proactive management

of its inputs. The actual figures presented estimating the extent of these savings are somewhat

artificial given that the counterfactual often implies a poorly managed project. Nevertheless, they are

manifestations of good practice, with examples including office sharing with ÉLAN in Lubumbashi,

using project guesthouses rather than hotels, and conducting an internal audit at no charge.

Efficiency (the rate of conversion of Inputs into Outputs)

There is no reporting on any of the current VFM indicators for Efficiency. In the 2016 VFM report,

there was one former Efficiency indicator reported on, which showed that only two of the processes

or procedures that Essor had either reviewed or drafted were actually adopted. On the face of it, this

seems like a very low conversion rate, particularly as adoption in the DRC context is still a very long

way short of actual implementation. Nevertheless, no qualitative information was provided to judge

if this was good performance. This indicator has been dropped from the latest version of the VFM

framework. This seems a shame as it would be important to understand if this ratio were expected

to improve with time. If not, it would suggest that Essor's efforts at supporting the early stage of

legislation development (i.e. reviewing and/or drafting) is not a particularly efficient use of resources

given that most are not adopted let alone implemented.

69 Note that it is a derived estimate, because the VFM report did not provide an aggregate figure but rather separated for international and national staff as well as short and long-term staff.


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Effectiveness (the rate of conversion of Outputs into Outcome and Impact)

For 2.5 years of implementation, Essor had not reported any data in terms of whether progress

towards the project's impact is being achieved. There were missed opportunities to capture the

effectiveness of interventions explicitly targeting 'Rapid Impact', such as the 2016 campaign raising

awareness that notaries' services in business registration are non-compulsory.

There is no reporting on any of the current or former VFM indicators for Effectiveness. Until Q3 of

2017 there was very limited clarity about how workstreams were specifically expected to contribute

to the overall project impact. Essor has now developed impact models for each workstream to

estimate their potential quantified contribution to impact. This is a significant step forward, although

the models developed remained imperfect and under development at the time of this evaluation.

The modelling document shared for the MTE70 started from the perspective of measurement and

monetisation rather than a discussion of what the specific benefits for each workstream are expected

to be and then an assessment of which of these benefits can be monetised or otherwise captured

and how. This made it difficult to understand what the full range of benefits for each intervention is

expected to be. For example, for the AVC workstream the benefits were only estimated in terms of

a reduction in the export tax. As stated elsewhere in this evaluation, it is likely that the greatest

potential impact from the AVC workstream would actually come from any progress with the reform

of the ONC. An equivalently narrow perspective of impact is apparent across the modelling for all of

the workstreams.

It is important to note that for many DFID projects the sub-set of benefits that can be monetised will

not necessarily outweigh the project's costs. The key then is being able to make a compelling case

as to why the remaining non-monetised benefits are sufficient to justify the investment. This is

currently absent from the impact modelling documents. Even where benefits cannot be monetised

there are ways that their achievement can be monitored and evaluated in a qualitative but rigorous

manner.

More specifically the version of the impact modelling approach that was available at the time of the

MTE71 included the following methodological weaknesses72:

a) The modelling of benefits for the MSME workstream made the assumption that legal tax revenue

collected by the government has no economic value (i.e. any £1 decrease in tax paid by business

is a £1 net benefit from DFID's perspective even though it means the government gets less

revenue). A similar assumption is made for the AVC workstream. In the DRC context, where

much, possibly most, tax collected is not remitted to the Treasury and only a proportion of

government expenditure in any case benefits Essor's ultimate target group of the Congolese

poor, this assumption is not completely extreme but should nonetheless be justified and probably

tempered (e.g. assume 20% of government tax collected is valuable rather than 0%).

b) The modelling of benefits for both the A2F and A2E interventions assume that every pound of

additional private sector investment into these sectors is a 100% benefit from DFID's perspective.

There would be two alternative options to model this more appropriately: (i) assume a relatively

high wastage rate for any attributable investment, e.g. only 15-40% of each pound of investment

70 'Measuring value for money in Essor: Explanation and Projections', Draft dated 26 September 2017. 71 'Measuring value for money in Essor: Explanation and Projections', Draft dated 26 September 2017. 72 This feedback was immediately fed back to the project (9 October 2017); as such these issues may since have been

addressed, although they were still present in the Q3 July–September 2017 Quarterly Report draft annex shared on 6 November 2017.


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is valuable from DFID's perspective, or (ii) clarify what the investment would actually be used for

and properly model the potential benefits that the investment itself might achieve.

The logframe at the time of the MTE also included proposed approaches for workstream-specific

evaluations. These evaluations might help ensure that impact can be rigorously captured. However,

as presently developed there is a risk that they will be excessively focused on quantitative benefits,

rather than the fuller range of qualitative benefits for each intervention. Their timing might also imply

focusing on capturing impact before interventions should be expected to have achieved it. The

greater need for the project may be to set out more convincingly the interim steps towards impact

for each intervention – with any workstream-specific monitoring and evaluation then focused on

assessing progress against this.

A key part of effectiveness is also determined by the extent to which the government commits to and

sustains reform efforts. This is a massive challenge in the DRC context. While there is now a

logframe indicator that counts the number of Essor-targeted institutions that have 'demonstrated a

commitment to reform', a useful more specific indicator of this commitment can be understood in

terms of what the government's own investment into particular areas of business environment reform

has been. This was included in the February 2017 VFM framework, although it has subsequently

been dropped without any reported achievement and a statement has been made that the project

was not targeting leveraging any government investment. This lack of prioritisation is worrying, given

that Essor only has two more years to run and has mostly focused on the early stage of the reform

process which will likely require substantial continued efforts to achieve impact.

One area where such leverage was indeed targeted but not achieved was for the running costs of

the GUCE antenna. This is estimated only as $2,500 per year, but is currently fully funded by Essor.

The strategy is for the GUCE to become autonomous and so raise and be able to spend its own

revenue to cover this running cost. Progress towards this should be explicitly tracked, alongside

examples from other workstreams where government investment (even if through agency-level

autonomous revenue-raising) or simply time commitment is required for sustained progress.

Equity

The project has made reasonable efforts to report against issues of gender equity. The 2016 VFM

report considered three aspects where Essor might have an influence73: (i) the proportion of those

participating in meetings, trainings and workshops that were female, which was under but close to

50%; (ii) the proportion of policies, laws and regulations discriminating against women that Essor

had reviewed or drafted, which was 0% at the time; and (iii) a baseline for the number of new

businesses registered that were female-owned (18%). In 2017, the quarterly reports and logframe

targets suggest that greater attention has been placed on addressing specific BER issues for

women.

There is less reported by the project in terms of its equitable impact relative to socioeconomic status.

To an extent there is a risk that this could become unhelpful given that the initial beneficiaries of

some reforms may indeed be non-poor, but this may be a necessary step towards ultimately

improving the income situations of the poorest. Equally, it is a current omission from the impact

modelling estimates to clarify the likely income profile of beneficiaries. If only benefits to the poor are

considered valuable, this might imply the need for an assumption reducing the overall estimates of

benefits. The implications will likely differ between workstreams (for example, AVC and AC

73 A baseline was reported on for a third indicator about the number of business registered that were female-owned. Were Essor to be targeting more specifically pro-women reform efforts then a consideration of the trajectory of this indicator might become relevant for assessing equality, but a standalone baseline is not.


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workstreams might have a more direct and quicker pro-poor impact than the A2E and OHADA

workstreams).

There is also not much reported by the project in terms of the geographical spread of impact. To

date the vast majority of project implementation has been focused in Kinshasa, although efforts have

been made to increase activities in both Goma and particularly Lubumbashi. There is ongoing

negotiation about the geographical locations for the A2E mini-grids, currently planned for Gemena,

Bumba and Isiro.


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Annex E Political Economy Context Assessment

E.1 Introduction

E.1.1 Objectives

The purpose of the Political Economy Context Assessment (PECA) is to examine the main political

and institutional factors in DRC that are relevant to understanding progress in the implementation

and achievement of results of the Department for International Development (DFID) Private Sector

Development (PSD) Programme and the ÉLAN and Essor projects (through which it is principally

being implemented), as part of the Mid-Term Evaluation of the PSD programme. Specifically, the

PECA has sought to provide evidence to answer five research questions:

1. What are the key features of the relationships between government, politicians and the private sector and what are the implications of these for policy making and implementation affecting the private sector and business environment?

2. To what extent is there commitment within government (at different levels and sectors) to improving the business environment for the private sector?

3. To what extent are legal and regulatory systems for business effectively implemented and enforced?

4. To what extent, and how, do the interests of the private sector (particularly small and medium enterprises, or SMEs) influence political decision making and government action (including at local level)?

5. To what extent, and how, do the interests of poor producers and consumers (as market participants) influence political decision making and government action?

E.1.2 Approach and methodology

The PECA is based on a review of literature (academic studies, analyses, documents and reports

from national and international organisations) addressing the key issues relevant for testing the PSD

programme, and ÉLAN and Essor projects' theory of change assumptions. The key topics

researched were governance at national and local level, state–society relations, rule of law and

corruption, business environment, livelihoods, poverty and social capital.

The document review is mainly based on analyses published by international institutions (African

Development Bank (AfDB), United Nations Development Programme (UNDP), International

Monetary Fund (IMF) and World Bank (WB), international non-government organisations (NGOs, for

example International Crisis Group – ICG, the Mo Ibrahim Foundation), internationally recognised

experts and academics, as well as on legislation and regulations adopted by the Congolese state.

The analysis focused on documents published after 2010, but mainly on the most recent analyses

realised in the last two or three years.

Fieldwork involved stakeholder analysis, key informant interviews and focus group discussions.

Relevant resource persons to gather information through interviews were generally available in

public institutions, at the level of representative organisations of enterprises and civil society. The

response to requests for interviews was, however, lower at the level of the Ministries, but for each of

the institutions interviewed, it was possible to get an interview with the main manager or the person

directly in charge of the issue.


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To ensure triangulation of evidence from different sources, the key informants were selected

according to three criteria:

• Balance between public authorities and civil society actors;

• Representation of the different actors of the private sector; and

• Balance between the actors in the field and the academic analysts.

Since the field mission was limited in time, no movement outside Kinshasa was possible. It would

be useful for future evaluations to deepen this PECA approach by conducting more focused context

analyses in some key areas or sectors in which the programme operates.

E.1.3 Structure of report

Section E.2 provides information on the political and institutional context of DRC. Section E.3

presents the findings of the PECA as answers to the research questions. Section E.4 considers the

validity of key assumptions of ÉLAN and Essor's Theories of Change in the light of the PECA

findings. Section E.5 provides additional information including the list of interviewees, a list of recent

regulatory and policy initiatives, and the references and bibliography.

E.2 Features of the political and institutional context

E.2.1 Characteristics of the political system

The Congolese political regime is often described as an authoritarian presidential system with weak

institutions (including the Parliament) and fragmented opposition forces (Trefon, 2011; 2012). The

political agenda since the last presidential elections has been dominated by security and electoral

issues (Berwouts, 2016; ICG, 2016) rather than social or economic issues despite continuing

economic instability. The succession of political negotiations ('governance by dialogue', as termed

by Englebert, 2016), the long duration of transitory government and the successive government

reshuffles, the staying in power of President Kabila beyond the constitutional deadline (end 2016,

'glissement' tactical manoeuvring) have led to a national context of high uncertainty. While the risk

of civil unrest or armed forces/groups violent intervention is a continuing feature, the key features of

Congolese governance remain: governance by confusion, dithering and dialogue, delegation, theft,

patronage and violence (Englebert, 2016).

'Governance by confusion' is regarded by Englebert as both a tactic to facilitate disengagement and

passivity from potential opposition, as well as a consequence of the weakness of the state and public

institutions. It is characterised by a continual failure to implement adopted policies, or voted bills, and

unaddressed contradictions between laws and provincial edicts. This confusion is currently a major

trait of the electoral process, with recommendations from national consultation and agreements

(especially the 'New Year's Eve agreement', 31 December 2016)74 not being implemented, the

budget for the electoral process not being allocated, necessary bills not being voted and, most

recently, the agreed schedule being postponed by the Commission Electorale Nationale

Indépendante (CENI) to 2019 (in place of December 2017) (Grip, 2017) ('Governance by Dithering').

The system is also governed 'by delegation': the state is largely absent, and frequently delegates its

missions to international, non-governmental or economic partners when it comes to delivering public

goods. State authority is, however, largely used for the private appropriation, accumulation and

redistribution of public resources (notably natural resources in mining and forestry) ('Governance by

74 This Agreement reached under the mediation of the Catholic Church includes a commitment for organising presidential elections before the end of 2017. Contrary to the agreement facilitated by Edem Kodjo (October 2016), the New Year's Eve agreement was signed by all key opposition parties.


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Theft'). The relationships between government, politicians and the private sector are mainly based

on informal and personal relationships (family and economic interests) at the highest level (corrupt

elites, Trefon, 2012). The frontiers between government (and more broadly, military and police

actors), politicians, and the private sector are porous.

This kleptocratic nature of governance is also organised and channelled through 'patronage'

practices. As Englebert (2016, p. 9) puts it: 'Subordinates are commonly appointed to positions of

authority with the understanding not only that they will help themselves, but also that they will 'pay'

for their appointment by channelling resources upward.' This makes it even more difficult to fight

against corruption (see below).

Violence and repression is also a persistent dimension of governance. In the last three years, in the

context of the approaching presidential election constitutional deadline, the government has used

violence to repress demonstrations and the mobilisation of opposition forces (ICG, 2016).

Despite the unpromising features of the context, reformers do exist in government, the administration

and more broadly among Congolese elites. They have, however, not been able to reverse the current

political and institutional context of mistrust (state–society relations) and instability (notably violence).

According to interviewees, the interests and power dynamics at higher level of governance do not

provide a favourable environment for reformers to implement effective reforms or for attempts at

external influence. They advise focusing on the middle management level rather than among the

current political elite. Detailed PECA at local and sectoral levels could help identify levers of change

at that level.

E.2.2 Corruption and the business environment

Anti-corruption initiatives remain very limited, and the institutional means to address corruption are

ineffective. The Commission on Ethics and the Fight against Corruption that existed during the

Transition (2003–2006) has not been re-established. There is no specific anti-corruption law, as

reprehensible acts are currently governed by the general Criminal Code. Parliamentary control is

characterised by a member of the Committee on Economy and Finance of the National Assembly

(ECOFIN) as 'pedagogical control': it provides information but does not include any sanctioning

dimension (Network of African parliamentarians against corruption).

On several occasions, the Congolese authorities have committed to fight against corruption. The

latest examples have been the declarations of Prime Minister Tshibala since he took office. More

recently (October 2017), in the context of the implementation of the 28 urgent economic measures

for economic recovery, Prime Minister Tshibala decided to restore the Luzumu prison (Bas-Congo)

as a threatening message to corrupt civil servants. This could be seen as a strong political

commitment to punish officials guilty of corruption; yet, according to observers and analysts, this

declaratory policy is not effectively pursued and implemented by the administrative and judicial

authorities.

In 2015, Luzolo Bambi, former Minister of Justice, was appointed Special Adviser to the Head of

State on good governance and in the fight against corruption. This function allows for whistleblowing

initiatives. On 4 August 2017, this Special Adviser sent a letter to the Attorney General of the

Republic, Flory Kabange Numbi, containing information on a set of 14 cases alleging charges of

documented tax evasion. Through this process, the Special Adviser denounced active public officials

and former officials from various public institutions (Régie des Voies Aériennes (RVA), Direction

Générale des Impôts (DGI), Office de Gestion du Fret Multimodal (OGEFREM)) but also business

managers (Minoterie du Congo (MINOGONGO), Lignes Aériennes Congolaises (LAC), and fuel

distribution companies: Cobil, Total and Engen), acting in complicity with different banks such as

Rawbank, the Banque Commerciale Du Congo (BCDC), ECOBANK or Standard Bank (Africa News).


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It remains to be seen how effectively these cases will be prosecuted, and if anything will be done

about the revelations, in December 2016, that President Joseph Kabila and his family constituted a

gigantic 'network of enterprises that extends to all sectors of the Congolese economy' (Kavanagh,

M. et al., 2016).

These examples, among many others, illustrate the climate surrounding this fight against corruption,

characterised by the development of contradictory information and confusion and the widespread

impunity that characterises the vast majority of the charges that have been revealed.

The Enterprise Survey's latest report on DRC (World Bank and IFC, 2013) shows that the country

indicators' levels on corruption are much higher than the average scores of sub-Saharan Africa. 55%

of small firms (1–19 employees) and 50.9% of medium firms (20–99 employees) are expected to

give gifts in meetings with tax inspectors; 42.9% and 68.4% respectively to give gifts to secure a

government contract. According to the survey, corruption is the fifth main business environment

obstacle:75 more than half of entrepreneurs say they personally face corruption. This observation is

further confirmed by the index of perception of corruption established annually by the NGO

Transparency International, which indicates more generally that the DRC ranks 156th out of the 176

countries in this index.76

E.3 Findings of the PECA

E.3.1 What are the key features of the relationships between government, politicians and the private sector, and what are the implications of these for policy making and implementation affecting the private sector and business environment?

The key features of the political economy of the DRC determine the relationships between the

government, politicians and the private sector and the business environment. Those were

summarised by Englebert (2016) as governance by confusion, dithering, delegation, theft, patronage

and violence. While all those features are important and interlinked (see Section 1), governance by

theft and patronage are key to understand the implications of the current political economy context

for the private sector and business environment.

Beyond the weakness of formal institutions, the relationships between government, politicians and

the private sector are mainly based on informal and personal relationships (family and economic

interests) at the highest level (corrupt elites, Trefon, 2012). The frontiers between government (and,

more broadly, military and police actors), politicians, and the private sector are porous. The proximity

and relations between political actors and large enterprises induce a conflict of interests that

negatively influences the policies regarding the promotion and the development of SMEs and poor

producers and consumers (interviews with the Centre National d'Appui au Développement et à la

Participation Populaire (CENADEP), the Confédération des Petites et Moyennes Entreprises

Congolaises (COPEMECO), and the Fédération des Organisations non-gouvernementales Laïque

à vocation économique du Congo (FOLECO)).

A kleptocratic state, however, in which the interests of political elites lie primarily with natural

resources (mining, forestry), rampant corruption, impunity and patronage, clientelism and insecurity

(Englebert, 2016; Kavanagh et al. 2016; Congo Research Group, 2017; Ibrahim index 2016), can

cast a shadow on a much more complex and diversified private sector and business environment

(See Doing Business report 2017, DRC; AfDB, 2012b). Those features of the Congolese political

75 From first to last, in percentage of firms identifying the problem as the main business environment obstacle: access to electricity; access to finance; political instability; practices informal sector; corruption; tax administration; crime; theft; disorder; tax rates; access to land; customs and trade regulation. 76 The low score of the DRC for this Transparency International index, which was 22 in the three previous years (2013–2015), decreased further in 2016 (21).


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economy undermine the trust and stability that are necessary as building blocks of economic

initiatives and development (interviews with the Conseil National des ONG de Développement de la

République Démocratique du Congo (CNONG), The Centre National d'Appui au Développement et

à la Participation Populaire (CENADEP), The Cadre permanent de concertation de la Femme

Congolaise (CAFCO), FOLECO, The Fédération des Entreprises au Congo (FEC), and

COPEMECO).

The Congolese private sector is strongly split between powerful private sector interests having the

ear of government (international and large-scale actors in key sectors such as mining and forestry)

and weaker smaller local actors. The government's macroeconomic policy priorities lie with export-

driven growth and foreign direct investment. They are viewed by (some) Congolese entrepreneurs

as favouring foreign and large entrepreneurs rather than ensuring the necessary protection of

Congolese SMEs. The owners of SMEs often take as an example the non-application of the

ordinance/law number 79–021 of 2 August 1979 and that of 8 August 1990, which reserve the

practice of the small trade in the DRC only to nationals. These ordinances and laws are practically

never applied except during some one-shot operations, such as the closure by the government of

some expatriate stores, in particular in 2013; but these measures are neither systematic nor

generalised, and therefore have no effect in the long term (interviews with COPEMECO, CAFCO).

In that global context, specific organisations defend the interests of the private sector, especially:

• FEC;

• Fédération nationale des artisans et Petites et Moyennes Entreprises du Congo (FENAPEC);

• COPEMECO;

• FOLECO;

• Union Congolaise des Armateurs des Baleinières (UCAB) ;

• Association de Femmes chef d'entreprise de la RDC (ASSOFE) ;

• Plate-forme de l'Entrepreneuriat Féminin de la RDC (PEF) ;

• Association des Femmes Entrepreneurs du Congo (AFEECO) ;

• Chambre de Commerce, de l'Industrie et des Métiers (CCIM) ; and

• Chambres de commerce bilatérales.

FEC is the most structured and influential organisation, and primarily defends the interests of large

enterprises. Interviewees have mentioned the existence of funding from large multinational

corporations. In that context, the FEC is viewed by several interviewees as 1) close to the authorities

(notably through its president, Yuma, and other leaders); and 2) using this proximity to lobby for a

business environment where the state does not intervene to regulate efficiently in the key sectors of

the economy. An illustration of this lobbying can be found in the decision taken by the prime minister

to suspend the control of large firms' activities by the Direction Générale des Recettes

Administratives – DGRAD (a decision that was rapidly contested by the Minister of Economy).

The associations defending the interests of SMEs and local entrepreneurs lack sufficient resources

– without external/donor funding – for developing activities and structuring a coherent and effective

lobbying discourse. They have been presented by several interviewees as empty shells serving the

interests of a small number of persons within these structures, and lacking wider legitimacy. What

some organisations deliver as service or support to their members is not clear. According to their

representatives, these associations are financed by the contributions of their members, but there is

little transparency about membership or financing. On the basis of observations made in the field,

apart from the FEC, these associations do not seem to have significant administrative, legal and

operational means. Most of them are constantly looking for foreign financial support. The legitimacy


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of associations' leaders as representatives of their members is also an issue. Management positions

in several associations are not (often) replaced (e.g. FENAPEC's president has been in post since

the creation of the organisation in 1987).

The private sector expresses the following main concerns to the government and politicians

regarding the business environment and its relationships with authorities (political and

administrative) (AfDB, 2012b):

• being pushed into or maintained in an informal sector/relationship through non-transparent and abusive procedures and taxation;

• being excluded from public procurements;

• being paid late (on average a delay of payment of 2–2.5 years, referred to as 'dette intérieur' by

local entrepreneurs); and

• being excluded from key informal dialogues and negotiations (see Question 4).

Existing consultation and dialogue bodies and forums are supposed to structure the relationships

between the actors, notably the Economic and Social Council, but the views of the latter have hardly

been solicited (one opinion was requested by the Presidency, none by the Government and

Parliament) and it mainly issues opinions on its own initiatives77 (interviews with the Conseil Régional

des Organisations Non Gouvernementales de Développement – CRONGD and the CNONG).

Several dialogue and collaboration forums were organised in recent years; for example, the 2017

roundtable on SMEs and the Forum on Fiscal policy. They do allow for raising awareness on SMEs’

interests (see Question 4), but political actors have not yet significantly acted upon and implemented

the recommendations (interviews with FEC, COPEMECO and the Agence Nationale pour la

Promotion des Investissements – ANAPI).

Various interesting recommendations have been formulated through dialogue without progress

towards implementation. Examples are recommendations made by the round table on SMEs

addressed, first, to the Parliament:

• to provide the DRC with a definition of SMEs appropriate to Congolese realities by accelerating the adoption of two draft laws for the promotion of entrepreneurship and the promotion of SMEs; and

• to ratify and implement the International Labour Organization Conventions and

Recommendations on Employment and Vocational Training.

And second, addressed to the government:

• to support the setting up of start-up incubators for support and supervision of the SMEs;

• to pay the commercial domestic debt; and

• to set up a joint commission composed of government and private sector experts to harmonise

views on some provisions of the law on outsourcing in the private sector.

The period of economic stabilisation and high tax revenues, during periods of high primary

commodities prices, was not opportunely used by the Congolese government to invest in projects to

support the Congolese private sector. Driven by a logic of 'modernisation' and the rent-seeking

opportunities provided by large projects, the government has invested in large industrial projects

whose benefits for the SME sector are extremely limited.

77 On issues such as oil exploitation, electricity supply deficit, and socioeconomic assessment since the 1960s.


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An example is the investment of over US$85 million in the development of an agro-industrial pilot

park of 75,000 hectares in Bukanga–Lonzo, 260 km from Kinshasa in Kwango province. This park,

whose exploitation was entrusted in 2014 to Africom, a South African consortium, faced problems of

poor soil quality, and by July 2017 only 25% of implementation has been achieved. The Minister of

Agriculture still hopes to restart the project by seeking financing from the African Development Bank.

But the chances of a restart of this activity are slim because this agro-industrial park is currently

completely at a standstill, and the soil tests done after the fact confirm that the choice of the site's

location is not appropriate. This pilot project was to precede the establishment of some 20 of these

agro-industrial parks across the country. Some interviewees considered that the amount actually

spent by government on the project may be twice the official figures (the Banque Centrale du Congo

– BCC, the Fonds de Promotion de l'Industrie FPI, Minister of Foreign Trade, parliamentary). This is

therefore a lost opportunity to invest in projects led by local and capable entrepreneurs who, in the

context of a more local or family-based agriculture, often can better meet the needs of the country

in terms of food security than an agro-industrial logic, as the UN Special Rapporteur on the Right to

Food has often pointed out.

According to interviewees, the dynamics at play at the national level can also be found at the

provincial level (interviews with COPEMECO, CENADEP). This can be explained by the

centralisation of decision making, the insufficient 'retrocessions'78 and the governance by patronage

that bring about resulting problems, such as the multiplication of taxes and administrative burdens

also at local and provincial levels.

The recent increase in the number of provinces (26 instead of 11) could in principle improve the

environment for supporting PSD, by bringing decision making closer to reality on the ground.

However, the newly created provinces are currently under-equipped in terms of human, financial and

material resources. The decentralisation process begun in 2006 is also still largely inoperative: in

some areas, deconcentrated structures sometimes compete with emerging decentralised provincial

administrations. Elsewhere these deconcentrated structures palliate the absence of decentralised

structures. Provinces and basic entities (ETDs) thus face competition from deconcentrated

administrations within their jurisdiction (such as territorial administrators, local divisional heads of

national ministries, etc.) that had previously held de jure (and, up to now, in part de facto) authority

over their areas of competence. Thus, the heads of divisions of the [local] public administration

continue to maintain with their hierarchy in Kinshasa the same relations as before, by neglecting to

establish links with the minister at the provincial level. The 2008 organic laws, which regulate

decentralisation, also contradict other laws relating to the functioning of the state, such as

establishing a tax system that recognises neither the provinces nor their governors. The actors of

decentralisation thus evolve in a legal imbroglio where nothing is firm, and everything can be the

object of interpretation (Englebert, 2012).

The weakness of formal institutions; the porosity of the borders between government, politicians and

the large enterprises; the priority given by the state to the development of externally oriented growth

based on modernisation, large enterprise and export; and bad governance are the main causes of

78 In a logic of decentralisation, Article 171 of the Constitution adopted in 2006 specifies that the finances of the central power and those of the provinces are distinct. To concretise the idea of political decentralisation at the provincial level and administrative decentralisation at the level of the basic entities (City, Commune, Sector, and Chiefdom), the constitution lays down the principle of the retrocession of a part of the national receipts to be allocated to the provinces. The retrocession rate is constitutionalised and set at 40%, and the retrocession is in principle withheld at source. A cascade retrocession also provides for a return of a part of the provincial tax revenues to the base entities. This principle of retrocession enshrined in the 2006 constitution is, to date, not applied systematically or completely. The national government is far from allocating 40% of its revenues to the provinces and to the basic entities and what is allocated is not deducted at source but retroceded by the central government. Between 2007 and 2011, the level of annual retrocession to the provinces represented between 6% and 15% of their budget; before the decentralisation, it was around 20%.


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the very limited impact in the design and implementation of policies that positively affect the private

sector and the business environment, especially for small Congolese enterprises and for the poorest.

E.3.2 To what extent is there commitment within government (at different levels and sectors) to improving the business environment for the private sector?

Several ministries and para-public institutions have a mandate to improve the business environment

for the private sector, including:

• the Ministry of Planning (Plan);

• the Ministry of Economy;

• the Ministry of SME;

• the Ministry of Industry and its CEPI;

• the Ministry of Finance;

• the ANAPI;

• the Office de Promotion de moyennes et petites Entreprises Congolaises (OPEC); and

• funding institutions, such as the Société Financière de Développement (SOFIDE) or FPI.

In a context of instability, and while the broad coalition government includes parties of the

presidential majority and the opposition (with a proliferation of government bodies providing

patronage opportunities), the diversity of these institutions mandated to improve the business

environment does not facilitate the emergence of a coherent policy, even if (as seen below) some

strategic documents have been published recently. Several parastatal institutions are trying to

restructure and consolidate their position in an unstable environment that does not favour investment

and consolidation of funds.

However, several important recent strategic and policy developments can be seen as indicating

some level of political interest within the government to improving the business environment for the

private sector to contribute to economic growth and poverty reduction:

• Document de Politique et des Stratégies Industrielles (DPSI) (2011);

• Application of OHADA's legislation and regulations (from September 2012);

• Programme d'Urgence de Soutien à l'Industrie Locale (PUSIL) (2016);

• Programme de Restructuration et de Mise à Niveau de l'Industrie (PRMN–EU funding);

• Stratégie Nationale de Développement des Petites et Moyennes Entreprises (SNPME) and

action plan (2017–2021);

• Plan National Stratégique de Développement 2017–2021 (PNSD);

• Development of the 'Guichet Unique'; and

• National laws and regulations promoting the creation and development of the private sector, such

as the law facilitating the obtainment of construction permits or the code on investments, etc.

Some interviewees stress that the dialogue and collaboration forums organised in recent years are

positive indicators of actors' commitment to improving the business environment for the private

sector (FENAPEC, COPEMECO, FEC, ANAPI; see Question 1).

Despite this, the implementation (the key indicator of commitment within government) of those

initiatives and strategies is still very limited (see Question 3). When they are more concrete, the

measures taken remained heavily concentrated on the sectors of exports or large companies.

ANAPI, for example, presents a dynamic image of investment promotion, but the promotion focuses

on sectors that do not provide direct opportunities for small enterprises or the poor. The promotion

of ANAPI focuses on major electric power generation (hydropower), agro-industry (mass production)


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of hydrocarbons (at sea), mines (copper, cobalt, nickel, chromium, phosphates, etc.), large-scale

infrastructure, etc.

Several long-standing structural problems hindering the development of SMEs have not been

addressed by the government: insufficient infrastructure (road/transport, energy,

production/transformation), politico-administrative burdens, and access to financing (Mufugunzi and

Tiemann, 2012).

The political context since 2014 (at least) has focused on security issues and electoral issues

(Berwouts, 2016), and this has diverted political attention and resources away from socioeconomic

priorities. The succession of political negotiations, the long duration of transitory government

(between the recommendations adopted at the end of the 'Concertations Nationales' in October 2013

and the nomination of Government Matata 2 in December 2014) and the successive reshufflings of

government have not been positive for ensuring political commitment.

At the provincial level, due to the closer proximity with the players in the field, a greater willingness

to engage in support to the private sector is sometimes observed (CENADEP, OPEC). However, the

very limited means of the provincial authorities and the lack of clear application of the

decentralisation process in most cases constrain the capacity of these local authorities.

The volume and quality of legislation relating to support to the private sector, the recent

reorganisation of several parastatal institutions supporting the private sector (ANAPI, FPI, and OPEC

in particular), and the more frequent consultation of the professional organisations representing

companies by the political authorities are elements that can confirm some commitment (or at least

an appearance of commitment) within the government to improve the business environment.

However, the low level of application of legislation, the little concrete impact of the activities of

parastatal institutions on the development of small economic activities, and the continuing high level

of general corruption and insecurity all show that, on the contrary, the government's commitment to

improving the business environment remains limited.

A concrete example of this difficulty for these public and parastatal institutions in improving the

business environment is the slowness with which business incubators are set up in the DRC.

OPEC currently identifies five incubator pilot projects:

• a project in the shoemaking sector, whose feasibility study is currently being carried out by the

Common Market for Eastern and Southern Africa and financed by the EU;

• a project in the field of essential oils, whose feasibility study is currently being carried out with

the support of South Africa;

• a project in the digital sector with the support of the Organisation internationale de la

Francophonie (OIF);

• a multisectoral project with the support of the Indian government; and

• a project in wood processing.

At the FEC, the Women's Entrepreneurs' Commission is negotiating with the AfDB to start an

incubator in the fisheries sector. In the SME department of the FEC, mention is made of other

initiatives of incubators in preparation: feasibility analysis, search for external financing, etc., but

nothing is really operational.

This study has found that none of the business incubation initiatives is really operational, and that

those which could possibly start in the future rely on external financing. No real commitment by the

Congolese government can be identified at this stage.


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E.3.3 To what extent are legal and regulatory systems for business effectively implemented and enforced?

Legal and regulatory systems for business are not effectively implemented and enforced, according

to several comparative (Doing Business, 2017; AfDB, 2012a) and monographic studies (Mufugunzi

and Tiemann, 2012; AfDB, 2012b). This issue is regularly discussed by fora and workshops

gathering stakeholders. It is also a key message regularly expressed in interviews, during which

numerous cases of non-application of the legal texts and laws are cited. This is the case, for example,

with an emblematic measure for the support of small-scale Congolese companies. The provisions of

Law No 73/009 of 05 January 1973, as amended by Law No 74/014 of 10 July 1974, which prohibit

the accumulation of profit margins and the retail trade by foreign nationals, are still not applied today

(COPEMECO, CENADEP).

There is also difficulty in applying the guarantees and tax advantages, which should be granted to

enterprises on the basis of the Investment Code (Law No. 004/2002) since 21 February 2002 and

are regularly avoided (Transport Company).

This same implementation difficulty is noted for the most recent measures taken to support

Congolese companies. Ministerial decrees (Nos. 009/010 / and 011 / CAB / MINETA.COMEXT /

2017) imposing restrictive measures on the import of staple foods (beer, soft drinks, iron bars,

cement), promulgated as an emergency on 25 August with immediate application, are not yet

implemented (FENAPEC).

In the Doing Business report 2017, DRC scores 184/190 (no change since 2016; 178/183 in 2012;

175/175 in 2007). The report analyses ten topics: starting a business, dealing with construction

permits, getting electricity, registering property, getting credit, protecting minority investors, paying

taxes, trading across borders, enforcing contracts and resolving insolvency. It summarises the most

recent reforms in those fields. The 'guichet unique' for starting a business is seen by most

stakeholders as a positive development in the implementation of a key reform for improving the

business environment (consolidation into a single location of all documents to be collected, reduced

cost of the procedure). Its existence is the first of the ten domains used to establish the score of the

Doing Business ranking. This 'guichet unique' was established in 2012 and is an independent

institution under the Ministry of Justice. Based in the Commercial Court buildings, it is currently

operational only in Kinshasa and only in two offices in La Gombe and Limete. A new office of 'guichet

unique' should soon open in Lubumbashi to be followed by offices in Matadi, Kisangani, Goma and

Bukavu (COPEMECO). This again illustrates the slowness of implementation – after five years of

existence, decentralisation of the one-stop shop has not yet occurred.

The final report of the Table-Ronde sur la PME (24 March 2017) (on the dialogue between

government and the private sector; see Question 4) states several recommendations that stress the

insufficient/lack of implementation and/or enforcement in the following areas (see final report for

detailed assessment and recommendations, 2017):

• Legal and regulatory revisions, notably:

revision of the definition of SMEs;

revision of taxation code;

• Access to funding and public procurements;

• Promotion of agricultural sector; and

• Value chain, innovation and ICT.


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The conclusions and recommendations of the National Forum on Reforming the Fiscal System in

the DRC (Kinshasa, 11–14 September 2017) reiterate the need to address recurrent problems

including:

• Alignment of the taxation definition of SMEs with that established by OHADA accounting law;

• Inclusion in the General Tax Code of all tax incentives and defining clear criteria for eligibility;

and

• Compensation for the debts of the state vis-à-vis the creditor companies under certain conditions

as defined by the provisions of the OHADA law in this matter.

Non-implementation and non-enforcement have to be analysed in a context of failing controlling (e.g.

ANAPI) or judiciary systems that lack the necessary political support and financial resources

(interview with CENADEP).

At the provincial level, the ability to legislate remains weak, and the confusion in the distribution of

competences between the national and provincial levels remains great because of the incomplete

nature of decentralisation (PAP–EU programme).

Documentary review and field data collection confirm that Congolese legislation is generally of good

quality and adequate for its purpose. However, legislation is not effectively implemented and

appropriate regulatory provisions are not made. But it is above all the application of these regulatory

provisions and the oversight of this application, which are practically non-existent.

E.3.4 To what extent, and how, do the interests of the private sector (particularly SMEs) influence political decision making and government action (including at local level)?

According to economic actors, administration and government actors are largely aware of the private

sector's (including SMEs') situation and demands. They are also aware of the importance of a strong

and healthy Congolese private sector in contributing to the country's economic growth, particularly

to the provision of sustainable employment for the Congolese labour force and especially the young

population. This situation is particularly crucial today in the face of economic degradation. For some

government actors, 'we are not far from an Arab Spring in Congo' (FPI).

While the private sector develops advocacy strategies notably during dialogue fora and through the

FEC, the overall influence of the private sector is weak (CENADEP, FPI, BCC).

Some claims may be heard by the government (cf. the recent oil debate), and some institutions and

strategies have been designed to answer some of those demands. An illustration is the creation by

the government of an agency in 2016, Programme d'Urgence de Soutien à l'Industrie Locale

(PUSIL). This Programme aims at promoting national entrepreneurship and Congolese industry

competitiveness. It is accompanied by a credit line worth US$10 million at Rawbank to support small

entrepreneurs.

Although several federations (FENAPEC, COPEMECO) have observed in recent months that the

political authorities are more attentive to consulting them in a targeted manner on specific issues,

there is yet no proper institutionalised and sustainable dialogue between the government and the

private sector – at least not in a transparent and inclusive fashion. In that context crucial information

may not be sufficiently shared with SMEs (for example the implementation of OHADA, interview with

COPEMECO). Formalising the public–private dialogue on entrepreneurship appears therefore to be

a priority (AfDB, 2017). Formalisation will not be sufficient to achieve influence, but is necessary for


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ensuring that SMEs lacking direct links to government have the opportunity to express their specific

interests.

Besides the current political and electoral context (see Question 2), several factors hinder the

uploading of SMEs' interests on the political agenda:

• the diversity of the private sector interests, especially the interests of SMEs and poor producers,

is not adequately taken into account, and is outweighed by the influence of key institutional

players like the FEC or sectors (mining, forestry, oil);

• the government's macroeconomic strategy, which focuses on export-driven growth of primary

commodities, large-scale industrialisation (e.g. agro-industry) and foreign direct investment; and

• the recommendations and commitments issued during the current dialogue mechanisms, which

tend to be general in nature and not followed by the necessary budgetary commitments.

Dedicated institutions (ANAPI) have the mandate to promote the interests of the private sector and

SMEs. They do plead for regulatory reforms and call for the commitment of all actors including the

government during dialogue forums (interviews with CENADEP, FOLECO, COPEMECO).

The uptake or non-uptake of the recommendations issued in the context of the Table-Ronde on

SMEs (24 March 2017) can be used as both an illustration of this weakness and as a benchmark for

assessing the most recent influence of the SMEs on government action.

The literature review (de Miliano et al., 2015) and different resource persons during the field mission

seem (CENADEP, OPEC, BCC) to acknowledge more legitimacy at the local level for non-

governmental actors. More directly confronted with local realities and/or closer to the populations

concerned, provincial and local authorities sometimes show a greater empathy for the concerns and

interests expressed by the private sector. However, the lack of material and human resources of

their institutions rarely allows for a real positive contribution by local politicians to social or economic

services.

The recent, more regular consultation of representative organisations of companies and the holding

of forums and dialogues allow the private sector to better communicate their interests and demands.

This improved dialogue may have a positive impact on policy decisions on legislation, such as the

recent ministerial decrees on the limitation of imports of staple foods. On the other hand, to the extent

that Congolese legislation is not applied effectively, the impact of this influence in the form of a

concrete improvement in the conditions of development of the private sector remains very limited.

E.3.5 To what extent, and how, do the interests of poor producers and consumers (as market participants) influence political decision making and government action?

The interests of poor producers, poor consumers and women have little influence on political

decision making and government action (interviews with COPEMECO, FOLECO, CAFCO). This

should be understood in the general context of weak and tenuous state–society relations (Chambers

and Booth, 2013).

This is confirmed by: 1) studies of population's perceptions of governance actors and the way they

act in the population's interest (subjective level); and 2) the analysis of the effect of government

action during the last decade of economic growth (5.2% on average between 2002 and 2015; 7.8%

between 2010 and 2014), which shows that the benefits of this economic growth have not been

directed towards poor producers and consumers (objective level).


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On the subjective level, a survey on livelihoods, service delivery and governance (de Miliano et al.,

2015) conducted in the Kivu, investigated the extent to which the population felt different governance

actors acted in their interests, cared about their opinions, reflected their priorities and contributed to

making improvements in access to services. The general level of trust and confidence is fairly low,

but customary and formal local governance actors score higher than provincial and national

governance actors.

Those perceptions are supported by the evolution of the different dimensions of the human

development index (0.435 and rank 176 in 2016) (UNDP, 2017), which has lagged the economic

growth achieved since 2002. Even if some poverty indicators have evolved positively, the trend can

still be qualified as 'growth without development' (Englebert, 2014), characterised by a growth that

is not socially or territorially inclusive. The levels of poverty and unemployment are very unequal

depending on the province, the urban/rural situation, the sector and age (UNDP, 2017). This once

again highlights that the benefits of growth have not reached the poor producers and consumers,

who have not been sufficiently taken into account as market players by policy makers (as shown by

the low investment in production and local producers, and the little support for promoting the

consumption of local products).

In addition, poor producers and poor consumers as market participants are affected by the

differentiated impact of corruption/impunity on enterprises according to their size. Formal medium-

sized enterprises are suffering most from state agents control and abusive practices (Mufungizi,

2012). Corruption and impunity push small actors back into the informal sector (interviews with

CAFCO, FOLECO, CENADEP, CNONGD). This context drives many SMEs to act on a day-to-day

basis, using informal channels and practices even if they have undergone the procedures to acquire

formal status (interview with COPEMECO).

The 'guichet unique' reform was designed to facilitate starting a business, but it did not produce an

increase in female entrepreneurship (interview with CAFCO). This stresses the need to address

other obstacles to female formal entrepreneurship. A key element probably lies in the access to

finance. In the context of the recent economic recession, the failing microcredit/banking sector had

the most impact on SMEs and women entrepreneurs, while not bringing about a specific action from

government to address this issue (interview with CAFCO).

E.4 Implications for assumptions in the ÉLAN and Essor Theories of Change

PSD's theory of change assumes that poor people will benefit (directly or indirectly) from

opportunities created by an improved business environment and pro-poor market innovations.

• PECA shows that the benefit (direct or indirect) of an improved business environment and pro-

poor market innovations for the poor can be severely disrupted by specific systemic problems:

rent-seeking activities by dominant economic interests, corruption, etc. These systemic issues

can have a strong negative effect that counteracts the potential positive impact of the activities

supported by the project. In this context of economic recession, rapid depreciation of the

exchange rate of the local currency and political and economic insecurity, the risk analysis of the

programme is crucial. More than for other programmes, it must be constantly checked and

adapted.

ÉLAN's theory of change is based on the following assumptions:

• Binding constraints to economic activity that perpetuate poverty can be addressed by changing

market systems.


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PECA shows that the current government economic strategy based on key primary sectors,

large-scale and international companies as well as the relations between government actors

and dominant economic interests perpetuate poverty of the poor producers and consumers.

PECA confirms the assumptions that this situation requires a change in market systems but

also requires a more favourable business environment that depends partly on legislative and

policy measures to be taken by the public authorities.

• Market systems can be strengthened (in the sense of being made more efficient and/or improving

the terms of access for the poor and vulnerable) without significant engagement with, or

commitment from, government.

The kleptocratic characteristic of governance and 'patronage' practices at virtually all levels of

government pose a significant risk to the project. Therefore, even if the project chooses to

intervene without relying on a significant commitment of the government, it must be constantly

attentive to this risk, to overcome the negative effects and the consequences of these corrupt

and kleptocratic practices. ÉLAN interventions do not become a focus of rent-seeking activities

that prevent benefits reaching target beneficiaries.

PECA did not identify any elements that would fundamentally challenge this assumption.

Essor's theory of change is based on the following assumptions:

• There is political will to engage in (pro-poor) business environment reform.

The literature review and field mission show that, while rhetorical commitment and some

initiatives are the expression of political will, implementation and enforcement – key indicators

of commitment within government – are largely insufficient.

• Facilitated private sector lobbying can strengthen this political will.

Private sector lobbying should be analysed, taking into account the fragmentation of the

private sector. Only large-scale business (national but even more international) lobbying

currently seems to have privileged and effective access to government.

• The political will to engage in business environment reform leads to legislative and regulatory

reforms and new processes and procedures.

Most analysis confirms that the existing legislation is reasonably adapted to the context and

in principle provides an adequate legal basis. The problem lies almost exclusively in the

ineffective application of the existing laws. In a context of non-implementation and

enforcement of adopted legislation and regulations, the focus on legislative and regulatory

reforms may not be effective in impacting the economic life of poor producers and consumers.

• Technical assistance will improve the ability of government ministries, departments and agencies

to formulate and implement effective reform programmes.

While technical assistance can improve the ability of public actors (institutions and civil

servants), notably as regards the formulation of reform programmes, it is largely proved to

be ineffective as far as implementation is concerned when political commitment is lacking.

• These reforms and processes are adequately resourced, implemented, and enforced.

PECA shows that resources, implementation and enforcement are inadequate.

• Corruption and patronage networks do not undermine the project or its workstreams.

Corruption and patronage being key features of the overall political economy context, the

project and workstream need to develop a specific response to this risk. For instance, three

key Essor workstreams (OHADA, agricultural value change, fight against corruption) are very

sensitive. The same is true for transversal elements of ÉLAN projects such as illegal tax

reduction or access to financing.

• Essor interventions do not become politically sensitive.


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It is important to note that success of Essor interventions would have a transformative effect

on business opportunities and access to resources (notably by diminishing rent seeking

opportunities) that would necessarily impact vested political and economic interests and

would therefore of necessity become politically sensitive.

It should be noted that while the literature review undertaken for the evaluation highlighted the

importance of PSD interventions being informed by a strong understanding of the developing political

economy context, neither ÉLAN nor Essor have regularly undertaken political economy analysis to

test key assumptions or the implications of political or economic developments for the political

economy context, or as part of a risk management process. Some more focused contextual analyses

seem to have been carried out at the projects level (ÉLAN interview), but they could be shared more

systematically between the different parts of the project and between the different projects to provide

a shared analysis of the context.


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Annex F Additional information

F.1 Recent regulatory and policy initiatives

These are some of the most recent regulatory and policy initiatives in support of the private sector

in the DRC:

• Policy and Industrial Strategies Document (DPSI) (2011);

• Application of OHADA's legislation and regulations (from September 2012);

• Emergency programme to support local industry (PUSIL) (2016);

• 28 'Urgent Measures' of the government of which the first ten are: the fight against tax fraud without concession; the evaluation of the VAT reform; diversification of mining production; control of the quality and the height of investments in the mining sector; maximising internal and external resources through the mobilisation of savings; the strengthening of sanctions against tax officials and economic operators; the effective recovery of Professional Tax on Remuneration; strengthening border controls to limit illegal exports; the strengthening and supervision of forest taxation and para-fiscal taxation; and the reduction of the lifestyle of public institutions (2016) ;

• National SME Development Strategy Programme (SNPME) and action plan (2017–2021);

• National Strategic Development Plan 2017–2021 (PNSD);

• Development of the 'Guichet unique';

• National laws and regulations promoting the creation and development of the private sector, such as law facilitating the obtainment of construction permits or the code on investments;

• Roundtable on SMEs (2017);

• Forum on Fiscal policy (2017);

• Law number 17/001 of 08 February 2017 setting the rules applicable to subcontracting in the private sector (2017);

• Ministerial orders 009, 010 and 011 / CAB / MINET.COMEXT / 2017 restricting imports of basic necessities (beers and soft drinks, iron bars, cement) (2017); and

• Internal reorganisations of ANAPI, FPI, and OPEC (2017).

F.2 Bibliography and references

AfDB (2010) 'Analyse de la pauvreté en République démocratique du Congo', Working Paper Series 112, African Development Bank, August.

AfDB (2012a) Environnement de l'Investissement Privé dans les Pays de la Communauté Économique des Etats de l'Afrique Centrale. Contraintes et Perspectives. Rapport regional, African Development Bank.

AfDB (2012b) Environnement de l'investissement Privé en République Démocratique du Congo, African Development Bank.

AfDB (2013) 'Promouvoir l'investissment privé dans les pays de la Communauté économique des Etats de l'Afrique central', Revue thématique trimestrielle Afrique centrale 1, March, African Development Bank.

AfDB (2013) République Démocratique du Congo, Document de stratégie Pays 2013–2017, June, African Development Bank.


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AfDB, OCDE, PNUD (2017) 'République Démocratique du Congo 2017', Perspectives Economiques en Afrique, African Development Bank.

ANAPI (2017) 'Multiples incitations accordées aux investisseurs en RDC', Kinshasa, March 2017, folder.

ANAPI (2017) 'Opportunités d'investissement sectorielles en RDC', Kinshasa, March 2017, folder.

APNAC RDC (2015) Le parlementaire et la lutte contre la corruption, Kinshasa, Réseau des parlementaires africains contre la corruption.

APNAC RDC (2016) Domestication des instruments juridiques internationaux, régionaux et sous-régionaux sur la lutte contre la corruption en RDC, Kinshasa, Réseau des parlementaires africains contre la corruption.

BCC (2017) Note de conjoncture au 29 septembre 2017, Kinshasa, September.

BCC (2017) Note de conjoncture au 29.09.2017, Kinshasa.

Beltrade (2016) Bulletin d'actualité économique de la RDC 40, April–August, www.beltrade-congo.com.

Beltrade (2017a) Bulletin d'actualité économique de la RDC 41, September 2016–January 2017, www.beltrade-congo.com.

Beltrade (2017b) Bulletin d'actualité économique de la RDC 42, February–June 2017, www.beltrade-congo.com.

Berwouts, K. (2016) 'La République démocratique du Congo: de la fin de règne au règne sans fin', Notes de l'Ifri July.

Chambers, C. and Booth, D. (2013) IRC/DRC governance sector strategy analysis. Final report, ODI.

Chêne, M. (2014) 'Overview of Corruption and Anticorruption in the Democratic Republic of Congo (DRC)', Anti-corruption helpdesk, Transparency International.

Conseil Économique et Social (2015) Diagnostic de la situation socio-économique de la RDC de 1960 à nos jours: stratégies et recommandations pour le redressement.

De Miliano, C. et al. (2015) 'Surveying livelihoods, service delivery and governance: baseline evidence from the Democratic Republic of Congo', Researching livelihoods and services affected by conflict, Working Paper, n°30, March 2015.

Englebert, P. (2014) 'Democratic Republic of Congo: Growth for All? Challenges and Opportunities for a New Economic Future', The Brenthurst Foundation Discussion Paper 6.

Englebert, P. (2016) 'Congo Blues. Scoring Kabila's Rule', Africa Center Issue Brief May.

FEC (2017) Table ronde sur la PME. Rapport Final, 24 March.

Gbadi Masiokpo, E. (2017) Situation économique de la RDC. Regard des services du FMI à l'issue de la mission du 31 mai au 07 juin 2017, slides from presentation, 22 June.

Global Partnership for Effective Development Cooperation (2016) Profil de suivi – République démocratique du Congo, October.

GRIP (2017) 'RDC: Enjeux et portraits autour d'un enlisement électoral', Les rapports du GRIP 2017/2.

GSDRC (2015) Political Economy and Governance in the Democratic Republic of Congo (DRC), Helpdesk Research Report (Haider, H., updates 2011 onwards by Rohwerder, B.).

Huggins, C. (2015) 'Land-grabbing, agricultural investment and land reform in the DRC', in Reyntjens, F. et al., L'Afrique des Grands Lacs, Annuaire 2014–2015, pp. 149–174.

Human Right Watch (2017) Democratic Republic of Congo. Country Summary, January.

ICG (2015) 'Congo: Is Democratic Change Possible', Africa Report 225.


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ICG (2016) 'Boulevard of Broken Dreams: The "Street" and Politics in DR Congo', Africa Briefing 123, October.

IMF (2015) 'Democratic Republic of the Congo. Selected Issues', IMF country report 15, October.

Journal Officiel de la RDC (2002) Loi n/°004/2002 du 21 février 2002 portant code des investissements, Kinshasa.

Journal Officiel de la RDC (2017) Législation publiée le 15 Septembre 2017 – Première partie, Kinshasa.

Kaghoma, C. (2014) 'PME et développement. Atouts, contraintes institutionnelles et perspectives dans le context de la RDC', Revue d'économie et de sciences sociales-Bukavu Journal of Economics and Social Sciences 2, Paris, L'Harmattan.

Kambale, O. and de Herdt, T. (2012) 'Congo: fragilité de l'Etat et fiscalité', in Reyntens, F. et al., L'Afrique des Grands Lacs, Annuaire 2011–2012, Paris, L'Harmattan, pp. 251–278.

Kavanagh, M., Wilson, T. and Wild, F. (2016) 'With His Family's Fortune at Stake, President Kabila Digs In', Bloomberg, 15 December, https://www.bloomberg.com/news/features/2016-12-15/with-his-family-fortune-at-stakecongo-president-kabila-digs-in.

Kikandi Kiuma, A. et al. (2014) Mobilité interne et entrepreneuriat des jeunes en République Démocratique du Congo, Rapport final, April.

Kinda, T., Montfort, M. and Ouedraogo, R. (2016) 'Commodity price shocks and financial sector fragility', FMI working paper 16/12, February.

Mo Ibrahim Foundation (2016a) A Decade of African Governance, 2006–2015, Country Insights Collection, pp. 90 ff.

Mo Ibrahim Foundation (2016b) Dix ans de gouvernance en Afrique 2006–2015, Rapport annuel 2016.

Mufungizi, A. (2015) 'Le future incertain du secteur agricole au Sud-Kivu: l'exemple de Kalehe', in Reyntjens, F. et al., L'Afrique des Grands Lacs, Annuaire 2014–2015, pp. 175–194.

Mufungizi, A. and Tiemann, A. (2012) 'Développement du secteur privé: gouvernance, croissance et contraintes', in Herderschee, J. et al. (eds.), Résilience d'un géant africain: accélérer la croissance et promouvoir l'emploi en République du Congo, Volume III, Médiaspaul, Kinshasa, pp. 333–388.

Ngalamulume Tshiebue, G. (2013) 'RDCongo. Les paysans et la lutte contre la pauvreté', La Revue Nouvelle, April, pp. 98–106.

OCDE, BAD et PNUD (2017) Perspectives économiques en Afrique en 2017. Entreprenariat et industrialisation.

Programme d'appui aux parlements (2015) Rapport final d'exécution de l'appui aux parlements nationaux (assemblée et sénat) et provinciaux (Kinshasa et Goma) par l'Union Européenne, Kinshasa, February.

RDC, Ministère du Commerce and PME (2010) Etude diagnostique sur l'intégration du commerce, Programme cadre integré renforcé (CIR) préparé par la Banque Mondiale, July.

Roux, J. (2014) République Démocratique du Congo. Secteurs prometteurs. Approche du marché. Recommandations, Brussels, invest-export.brussels.

Staines, N. (2016) Congo RDC. Développements économiques, Slides from presentation, November.

Staines, N. (2017) RDCongo. Développement économique récent et defis en moyen-terme, FMI, Slides from presentation, March.

Staines, N. and Petit, A. (2017) Réforme fiscal: tendances récentes et implications pour la RDC, Slides from presentation, Kinshasa, 11–14 September.

https://www.bloomberg.com/news/features/2016-12-15/with-his-family-fortune-at-stakecongo-president-kabila-digs-in

https://www.bloomberg.com/news/features/2016-12-15/with-his-family-fortune-at-stakecongo-president-kabila-digs-in


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Staines, N. et Petit, A. (2017) Incitations fiscales, investissements et croissance. Forum national sur la réforme du système fiscal de la RDC, Slides from presentation, Kinshasa, 11–14 September.

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UNDP (2015) Inégalités politiques, socio-économiques et édification de la nation/Etat en République démocratique du Congo, May.

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UNDP (2017b) Rapport national sur le développement humain 2016. Croissance inclusive, développement durable et défi de la décentralisation en République démocratique du Congo, Presentation of the report, 28 September.

UNDP, Note d'orientation. Atelier de lancement du processus de formulation de la stratégie nationale de développement des petites et moyennes entreprises (PME).

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Zamfir, I. (2016) La croissance économique de l'Afrique. Décollage ou ralentissement? Analyse approfondie, EPRS–Service de recherché du Parlement européen, January.

F.3 Summary of Essor MSME Survey Results

F.3.1 Objective

The objective of the survey was to improve Essor's knowledge of the characteristics, problems and

obstacles to growth for SMEs, in order to formulate proposals to promote SME growth and to improve

advocacy with legislators.

The survey was conducted through a quantitative survey with 931 SMEs and MSMEs, and nine

focus group discussions lasting on average two hours (three in Kinshasa and two in three other

cities) with 79 participants (63% women). The survey took place during the first quarter of 2016.

F.3.2 Methodology

Sample frame: lists provided by professional associations and, most importantly, enumeration of

businesses in randomly selected neighborhoods.

• Stratified sample with quotas (%) to have a 'representative' sample:

50% UPI, 50% UPF;

Kinshasa 43.5%, Lubumbashi 22%, Mbandaka 15%, Goma 19.5%;

Size: 1-5, 6-50, 51-200; 60/30/10% for UPI and 70/20/10% for UPF;


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Commerce 49%, industry 18% and services 33%; and

Women: 63% in UPI, 20% in UPF

F.3.3 Summary results

Profile

'Medium' profile: a small business of three, created about six years ago, of which the owner (92%

unique) is most often a man (60%), who rented a room or a location (73%) to ply his one trade (59%),

with stable workforce in the last 12 months (87%) and workers mostly women (67%).

Average (weighted) = 3.2 workers; unweighted average size = 3.9 workers.

Job creation figures are sometimes contradictory, but the message is clear: the workforce of the vast

majority of companies (87%) remained unchanged for a year.

Electricity access

59% of the enterprises are connected to SNEL, but only 1% in Mbandaka; In Lubumbashi 9 out of

10 enterprises (88%) are connected to the SNEL.

A third party has another source of electricity, almost always a generator (31% of all) and much more

rarely a solar panel (6%, but 18% in Goma).

SNEL's average monthly bill: $44.

Monthly cost of a generator: $108.

Large differences, both between cities and within a city, partly explained by the size distribution of

firms.

Finance

• The average annual turnover in 2015: $9,455 ($31,817 in Kinshasa).

• Large dispersion around averages, e.g. max = $1.2 million in Kinshasa.

• Average amount invested at time of creation $4,307, huge differences between companies.

• Amount of the three main expenses incurred during the last year: $557, $495 and $867.

• Main source of funding for creation: savings personal (87%).

• Low use of formal financial services, e.g. only 9% requested a loan from a financial institution during last 12 months.

• Large proportion of Goma's businesses, about a third, declare having an account with a microfinance institution and 'mobile money'.

• Few difficulties when repaying the loan and low difference between the amounts requested and the amounts obtained.

• Loan spent primarily to purchase goods (35%) or equipment (35%).

Business Membership Organisations

Low degree of affiliation to professional organisations (less than 15%).

Only 9% of companies (but 18% in Mbandaka) formed a grouping with similar companies.


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Two-thirds of companies say they are interested in grouping with other companies.

Respondents who are not interested in giving in their vast majority of vague reasons such as 'I do

not see the interest of such groups' or 'I am not interested'.

The constraints

Three main obstacles to activity: political instability, crime and taxes too high and the lack of access

to electricity.

Three obstacles least restrictive: inadequacy of labor force, lack of qualification / training and labor

regulations.

Women more concerned about crime.

Men more concerned about taxes and access to electricity.

Notable differences exist between cities.

Needs

Most important needs to develop the company:

Better location (70%), more space or better locality to develop their business (67%), improve

customer base from seasonal to year-round (55%), reduce administrative hurdles (54%) and receive

a credit to purchase equipment (54%).

Only 30% consider that the increase in the number of workers is a priority.

About ¼ of the respondents seem to have some familiarity with OHADA and related notions /

provisions, e.g. said to know the acronym OHADA 25%, but only 56% gives the correct answer; said

to know the acronym RCCM 32%, but only 46% gives the correct answer.

In 70% of companies, it is the owner himself who holds the accounts, the manager being charged

only in 19% of cases.

51% do not count or settle for personal notes.

About one-third maintain a record of income and expenditure and approximately 10% hold formal

written accounting (5% according to OHADA and 5% according to Congolese General Accounting).

Legal status and registration

71% of companies surveyed without legal status by right commercial.

Over 90% of Lubumbashi respondents did not report legal status.

Most widely reported status: limited liability company (S.A.R.L.), 11%.

In Kinshasa, 19% say Development NGOs (NGDOs) as status.

Surprising proportion of respondents in Mbandaka and Goma declare to have formed a public limited

company.


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27% patent, 28% RCCM registration; Other registrations 39%: national identification number (22%),

tax number (30%), INSS membership number (8%), VAT number (12%) and others (15%, but 41%

in Lubumbashi).

Average amount paid to obtain a RCCM registration: $121; Average time between submission of the

application and receipt of the RCCM number: 27 days.

In Kinshasa, there is only 2% difference between % women who declare having a licence (21%) and

% men who declare having a licence (19%).

UPI formalisation: Section only for UPI, 482 companies in total.

The three main obstacles: cost of proceedings, length of proceedings and perception that the

business is too small to be registered.

The most popular benefits: reduction of informal taxes if the company is registered, access to

management and accounting support, and access to social security (subject to payment of

contributions).

The majority of benefits are of interest to over 40% of respondents.

The least popular benefit: possibility to give a receipt or a receipt to customers.

Taxes, taxes and royalties legal / formal

Very low response rate: only a minority declare (report gives the number of respondents for each

type of tax).

Complexity of the theme, lack of familiarity with the terminology – it is necessary to treat these data

with caution.

Payment of the most popular licence: 22%.

Other taxes are paid by less than 10%.

Average amount paid in the previous year: $96 per enterprise (N = 931) – underestimation because

of many answers!

Illegal payments / informal taxes

• Total amount paid in the previous year: $101 per Respondent (N = 325).

• Total amount paid in the last 30 days: $21 per respondent (N = 283).

• In Kinshasa, these payments were mostly made to police officers (almost 60%), but also from the commune, from Kinshasa City Hall and organised gangs of the disabled (about 20% each).

• Five trips made in the last 12 months to tax authorities, with an average cost of $9 per trip.

Harassment

• Most frequent harassment: police (34%), local authorities (32%), tax administration (24%) and Ministry of Economy Inspectors (20%).

• The main 'culprits' are: police in Kinshasa (57%), local authorities in Lubumbashi (44%) and tax administration in the other two cities.

• Very low frequency of harassment in Mbandaka.


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• 60% would not make a 'gift' when there is a check / visit from tax administration, 20% sometimes, 20% often or always.

• In Kinshasa, only 4% difference between % of women who report always or often have to pay a 'gift' to the agents of the administration tax (26%) and % of men (30%).

The degree of trust in the institutions

• Generally, low level of confidence in the professions, services and institutions that concern MSMEs.

• Highest score, for commercial banks: 28%, which, moreover, do not have the trust of a third party, so negative balance of 5%.

• Commercial banks get a small positive balance of opinions Kinshasa (3%) and Lubumbashi (8%).

• All other institutions / professions have a negative balance of -20% or inferior.

• The 'loser loser' consists of SNEL, the police, and the courts, closely followed by the notaries and the commune.

• In Kinshasa, the police, the notaries and the courts form the 'loser loser', followed by SNEL and the commune.

Women's obstacles

Obstacles on the list all considered as non-existing or minor by at least 40% of respondents (48% in

Kinshasa).

• Major or very high barriers: administrative and fiscal harassment (27%), lack of time because of family responsibilities (25%), distrust spouse (24%) and access to finance (24%).

• The obstacle generated by administrative and fiscal harassment also receives the lowest score (40%) among the obstacles considered as the least important (and even 26% in Lubumbashi).

• There are other notable differences between cities, for example between Kinshasa and other cities regarding access to finance (major obstacle for 18% in Kinshasa, 32% in Lubumbashi) and the need to have marital authorisation (major obstacle for 7% in Mbandaka but 37% in Lubumbashi).

Proposed solutions to favor the commercial activity for women entrepreneurs:

• 48% responded that there is 'no solution and it is the government who is responsible for finding the solution';

• 11% say that 'you have to trust the woman and empower them'; and

• Other responses are given by less than 6% of respondents and include, in order of frequency: review the family code and promote the empowerment of women.

Decision Support Unit (DSU)

Documents

Transcript of Decision Support Unit (DSU)